Syllabus:

GS-3: Challenges to internal security through communication networks, role of media and social networking sites in internal security challenges, basics of cyber security; money-laundering and its prevention

Context: Recently, the Department of Telecommunications (DoT) and the Financial Intelligence Unit-India (FIU-IND) have inked a detailed Memorandum of Understanding (MoU) to Combat Cybercrimes and Frauds. 

Key Highlights of the MoU

• Enhanced Data Sharing Mechanisms:

• Real-time sharing of Financial Fraud Risk Indicator (FRI) data, which classifies mobile numbers as medium, high, or very high risk based on their association with financial fraud. 
• DoT will share Mobile Number Revocation List (MNRL) data, including the date and reason of such disconnection, with FIU-IND on an automatic basis.
• FIU-IN will share mobile numbers linked to accounts involved in Suspicious Transaction Reports (STRs) related to cyber fraud and money mule activities.
• Information exchange will be facilitated leveraging advanced technology platforms like DoT's Digital Intelligence Platform (DIP) and FIU-IND's Finnex 2.0 portal.
• System-based exchange portals will enable secure, real-time data transmission between the agencies.

• Strengthening India’s telecom cybersecurity ecosystem: The collaboration will significantly enhance the country's ability to:

• Prevent Financial Crimes: By combining DoT's telecom intelligence with FIU-IND's financial intelligence, authorities can now identify and act against fraudulent mobile connections before they cause financial damage to citizens.
• Protect Digital Transactions: The shared FRI data will enable financial institutions to implement enhanced risk checks for mobile numbers flagged as high-risk during digital payment transactions.
• Real-Time Intelligence for Proactive Action: The MoU allows both agencies to move from reactive to proactive fraud detection. The Financial Fraud Risk Indicator (FRI), built using data from DoT’s Chakshu platform, financial institutions, and law enforcement, offers early alerts on potentially fraudulent mobile numbers.

Significance 

• Shift to Proactive Fraud Detection: It enables a shift from reactive to proactive fraud detection using the Financial Fraud Risk Indicator (FRI) system.
• Strengthening Digital Payment Security: It strengthens protection of India's rapidly growing digital payment ecosystem from sophisticated fraud schemes.
• Complementing Existing Platforms: It complements existing platforms like Sanchar Saathi, which has disconnected millions of fraudulent connections.
• Standard Operating Procedures and Feedback: It establishes standard operating procedures and feedback mechanisms for continuous improvement in fraud detection.
• Supporting Guidelines and Red-Flag Indicators: It supports issuance of guidelines and red-flag indicators to financial entities for improved prevention.

About the Bodies 

• Financial Intelligence Unit-India: FIU-IND is the central national agency responsible for receiving, processing, analyzing, and disseminating information relating to suspect financial transactions and coordinating efforts against money laundering and financing of terroris.

• Digital Intelligence Unit (DIU): Digital Intelligence Unit of Department of Telecom is a specialized wing established to devise comprehensive systems for curbing the misuse of telecom resources for cyber-crime and financial fraud. 

• DIU has implemented several AI and big data solutions, including ASTR (detects multiple SIMs and forged KYC), CIOR (blocks spoofed international calls), Sanchar Saathi portal & app, and the Financial Fraud Risk Indicator (FRI).

Sources:

Communications Today
PIB.Gov
Telecom.Economic Times. India Times
DD News