The gazette notification, issued by the Home Ministry, said that Islamic Research Foundation (IRF) has violated certain provisions of Foreign Contribution Regulations Act and therefore "would obtain prior permission from central government before accepting any foreign contribution".
Issuance of a gazette notification under Section 11(3) of the FCRA 2010 is a rare instance and such an act could also be done through an official order, sources said.
The Reserve Bank of India, henceforth, has to inform the Home Ministry about all funds coming to the NGO and permission has to be taken from the ministry before releasing them to IRF.
Sources said last month the Home Ministry had renewed the FCRA licence of IRF despite several ongoing probes against the NGO and its founder Naik including one by the Home Ministry itself.
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Naik was accused of radicalising and attracting youths for terror acts.
Naik has come under the scanner of the security agencies after Bangladeshi newspaper 'Daily Star' had reported that one of the attackers of the July 1 terror strike in Dhaka, Rohan Imtiaz, ran a propaganda on Facebook last year quoting Naik.
He, in a lecture aired on Peace TV, an international Islamic channel, had reportedly "urged all Muslims to be terrorists".
He is popular in Bangladesh through his Peace TV, although his preachings often demean other religions and even other Muslim sects.