Caritas India, an arm of Catholic Bishops Conference of India (CBCI), has been put under "prior approval category" by the NDA government.
"Prior approval category" means that any transaction made by the organisation through Indian banks, will require clearance from the Ministry of Home Affairs (MHA).
It is the 17th international NGO to be put under this watch-list, the last one being Ford Foundation.
At least ten of the 17 organisations were put under this category during the UPA's tenure, revealed an official.
According to a national daily, a senior government official said that the organisation was put under the category after its funds, given to various NGOs, were found to be involved in anti-India activities.
Reportedly, Caritas was also mentioned in the 2012 secret report prepared by the Intelligence Bureau (IB), detailing the activities of NGOs working 'against' the economic interests of the country.
The MHA took the decision last week after receiving information from credible sources that the NGO's funds were being misused, a senior was reported as saying.
