Indian authorities declared the Popular Front of India (PFI) and its affiliates an "unlawful association" with immediate effect on Wednesday, banning it for five years.
The order comes after the authorities detained scores of members of the Islamic group on Tuesday and earlier in the month, accusing them of violence and anti-national activities. PFI has denied the charges and condemned the detentions and related raids as harassment and held street protests.
A government notification on Wednesday said that PFI authorities are raising funds in India and overseas as part of a "criminal conspiracy" and then transferring it through multiple accounts to show them as legitimate.
These funds are then used to carry out "various criminal, unlawful and terrorist activities in the country," it added.
Earlier on Tuesday, police in India's most populous state of Uttar Pradesh said they detained 57 persons linked to the PFI because of "violent acts conducted by them and their rising anti-national activities across the country".