Over 1,000 NGOs have been barred from receiving foreign aid after they were found "mis-utilising" such funds, Union minister Kiren Rijiju informed the Lok Sabha on Tuesday.
He said more than 2,000 non-government organisations have been asked to validate their existing bank accounts designated for receiving funds from abroad.
All the voluntary organisations need to be registered under the Foreign Contribution (Regulation) (FCRA) Act to be eligible to receive financial aid from abroad.
According to the Act, all banks shall report any transaction in respect of receipt of utilisation of any foreign contribution by a person to the central government within 48 hours.
"Over 1,000 NGOs found to be mis-utilising foreign funds and violating various provisions of FCRA, 2010 and rules made there under, have been barred from operating their foreign contribution accounts," the Minister of State for Home Affairs said in a written reply.
The home ministry has already asked the NGOs receiving foreign funds to file annual returns, showing expenses and receipts of any such grant.