The Missionaries of Charity denied reports that the order's bank accounts have been frozen but said the order's renewal application under the Foreign Contribution Regulation Act was not approved. This means the nuns in India may not use any foreign currency account "until the matter is resolved."
Critics described the action as further evidence of harassment of Christians under the Hindu nationalist government.
"We have been informed that our FCRA (Foreign Contribution Regulation Act) renewal application has not been approved. Therefore, as a measure to ensure there is no lapse, we have asked our centers not to operate any of the FC accounts until the matter is resolved," said Sister Prema Pierick, the congregation's superior general, in a statement Dec. 27. Ucanews.com reported the statement, citing additional reporting from Agence France-Presse.
In India, a license under FCRA is a must for receiving foreign donations. One newspaper said the order received around $750 million from abroad in the 2020-21 financial year.
The Missionaries of Charity clarification came after Indian media reported that the federal government had frozen the foreign fund accounts of the congregation, ucanews.com reported.
Jesuit Father Cedric Prakash, an Indian rights activist, said: "The MC nuns care for thousands of the rejected of India without counting the cost. Stopping the flow of funds to them, in simple terms, means depriving the poorest of the poor in India -- humans whom no one cares for."
The government move denies the destitute people "the basic human need of shelter and food, not to mention the acceptance, warmth and love which they desperately need and which the sisters and brothers give them so ungrudgingly," Father Prakash said.
He said he wanted the government to "reconsider this terrible decision and restore the good name and work of the MC nuns."
"If there are any laxities or shortcomings (in the renewal application), the MC nuns must be helped to address them; and above all, to ensure that those who are cared for in the MC institutions are not deprived of this basic humanitarian assistance," he added.
Msgr. Dominic Gomes, vicar general of the Archdiocese of Calcutta, said the announcement was "a cruel Christmas gift to the poorest of the poor."
"Besides over 22,000 direct dependents and beneficiaries at their centers across the country, MC Sisters and Brothers reach out to uplift thousands and are often the only friends of the lepers and social outcast no one will even venture near," Msgr. Gomes said.
AFP reported the news came two weeks after police in Gujarat, Prime Minister Narendra Modi's home state, began investigating the Missionaries of Charity for alleged "forceful conversion" of Hindus to Christianity -- a regular accusation by hardline members of India's majority religion.
Activists say religious minorities in India have faced increased levels of discrimination and violence since Modi's Hindu nationalist Bharatiya Janata Party came to power in 2014.