India to link mobile numbers and payments in fraud crackdown

By Vriti Gothi

In response to the rising tide of cyberfraud and identity theft across the country, the Department of Telecommunications (DoT) has proposed the creation of a Mobile Number Validation (MNV) platform. The new system will enable banks, FinTech companies, and UPI applications to verify the ownership of mobile numbers directly with telecom operators. The objective is clear: to curb the misuse of mobile connections in fraudulent activities, particularly the operation of so-called “mule accounts” that fraudsters employ to withdraw illicit funds after committing financial crimes.

India’s payments ecosystem has grown rapidly in recent years, with the country emerging as one of the world’s largest digital transaction markets. Alongside this expansion, however, cybercriminals have become more sophisticated in exploiting vulnerabilities. Fraudulent accounts, often linked to unverified or falsely registered mobile numbers, have become a persistent challenge for banks and payment providers. The DoT’s proposal aims to close this gap by ensuring that mobile numbers can be validated at source, reducing the chances of impersonation and limiting opportunities for criminals to misuse multiple SIM cards registered under the same identity.

The MNV platform is expected to provide real-time verification, creating an additional layer of security that will benefit both businesses and consumers. For financial institutions, it promises a more reliable safeguard against identity-related fraud, complementing existing KYC and OTP-based checks that have shown limitations when faced with increasingly complex fraud schemes. For customers, it offers reassurance that their transactions are more secure, bolstering trust in digital payment channels such as UPI, which continues to dominate India’s retail payments landscape.

Industry voices have welcomed the development, noting the positive implications for fraud prevention and consumer protection.

Reeju Datta, Co-founder of Cashfree Payments, said, “We welcome the move to enable banks and UPI apps to verify mobile number ownership directly with telecom operators. By curbing identity fraud, preventing mule accounts, and addressing misuse of multiple SIMs under a single ID, this initiative will meaningfully strengthen trust and security in financial transactions. It will make UPI and other digital payments safer, while building long-term confidence among businesses and consumers alike.”

For FinTech companies, particularly those operating in high-volume spaces such as UPI payments and digital lending, the platform could significantly streamline onboarding and compliance processes. By providing faster and more accurate verification, it would reduce operational risks while improving the efficiency of customer acquisition. At the same time, the initiative aligns with broader regulatory efforts by the Reserve Bank of India and other agencies to tighten safeguards against fraud and protect consumers in a rapidly expanding financial ecosystem.

The timing of the proposal is especially relevant as UPI volumes continue to break records, crossing 20 billion transactions in a single month this year. While this growth is a testament to India’s digital adoption, it has also widened the attack surface for fraudsters. The MNV platform represents a proactive step toward strengthening transaction integrity and ensuring that the momentum of digital payments is not undermined by rising fraud cases. If implemented effectively, it could also set a precedent for other countries grappling with similar challenges, positioning India as a global leader in telecom-FinTech collaboration for fraud prevention.