Investigation of Fintech Startup Jar Underway by the Criminal Investigation Department
The Criminal Investigation Department (CID) has initiated an inquiry into the fintech company Jar, operating under the auspices of the Banning of Unregulated Deposit Schemes Act, 2019.
This investigation is rooted in a First Information Report (FIR) filed against the company last month. Jar, however, has contested the FIR, seeking its annulment from the Karnataka High Court.
The presiding Justice M Nagaprasanna concluded the hearings between the petitioners and the police on Saturday (February 21) and has reserved judgment on the matter.
Officials from the Deposit Fraud Investigation division within the CID are scrutinizing Jar on allegations that the Bengaluru-based startup has been operating without the requisite licensing from either the Securities and Exchange Board of India (Sebi) or the Reserve Bank of India (RBI).
Sources within the CID disclosed to ET that the investigation remains active.
In an official statement responding to ET’s inquiries, a Jar spokesperson commented, We are fully cooperating with the authorities and have provided all requested information.
Given that the matter is presently sub judice, it would be inappropriate for us to comment on specific allegations. We are confident that clarity will emerge through the due process of law.
The CID’s investigation focuses on purported infringements delineated in Sections 21(1) and 21(2) of the aforementioned legislation, which encompass fraudulent deposit-taking practices and defaults in deposit repayment.
Additionally, Jar has appealed to the Karnataka High Court, seeking a stay on all proceedings stemming from the FIR, along with a directive for the CID to unlock its registered office and return all items seized during the investigation.
This request notably includes unfreezing their bank accounts and the return of various electronic devices and precious metals.
Founded in 2021, the digital gold savings application Jar has successfully raised approximately $63 million in equity funding from prominent investors, such as Tiger Global Management, Arkam Ventures, and Panthera Capital Investments.
Financially, Jar reported total revenues of ₹2,450 crore and a net loss of ₹50 crore in FY2025, as per data from Tracxn. The company facilitates customer fund processing, channeling investments into digital gold via partnered systems.
Notably, the startup provides a routine savings mechanism, allowing customers to invest small daily amounts through a UPI recurring payments feature, which subsequently purchases digital gold.
This enables customers to liquidate their digital gold investments and potentially realize returns.
The Koramangala police initiated the FIR on January 16, subsequently transferring the case to the CID for further investigation.
Source link: M.economictimes.com.
