The move by the Centre came a day after the Maharashtra government ordered a probe into the sermons by the 50-year-old televangelist that has kicked up a storm.
The activities of the IRF came under the scanner of the Union Home Ministry amid allegations that funds from abroad received by it have been spent on political activities and inspiring people towards radical views.
A senior Home Ministry official said an investigation has been ordered into the activities of IRF, which was registered under the Foreign Contribution Regulation Act (FCRA).
The Home Ministry probe will cover the allegations that foreign funding to IRF was used in political activities and allegations that the NGO's funds were used to induce people towards Islam and "attracting" youths towards terror, the official said.
All such activities are contrary to the FCRA provisions and any violation invites punitive action.
IRF's source of foreign funding will also be examined thoroughly by the Home Ministry, the official said.
An online petition has been filed with the Home Ministry listing all the allegations against IRF as well as Naik.
Home Minister Rajnath Singh saidCDs of Naik's speeches are being examined fornecessary action and asserted that the government will not compromise on the issue of terrorism.
"We have taken cognisance of Zakir Naik's speeches and have given necessary instructions for a probe. A thorough investigation will be done.
"CDs of his speeches are being examined," Singh told reporters on the sidelines of a function here.
The Home Minister said necessary action will be taken in this regard.
"As far as government is concerned, we will not compromise on terrorism at any cost. Whatever is justified will be done," he said.
Officials said according to an intelligence report the content of the "Peace TV", in which Naik regularly appears and gives sermons, is "not conducive" to the security environment in the country and poses "security hazard".
Naik yesterday released a statement, saying he "totally disagreed" that he inspired the act of killing innocent people in Dhaka. "There is not a single talk of mine where I encouraged one to kill another, whether Muslim or non-Muslim."
Naik's speeches are believed to have inspired some of the Bangladeshi militants, who killed 22 people, mostly foreigners, at an upscale restaurant in Dhaka last Friday.
Hitting back at BJP for targeting him over sharing dais with Naik, Congress leader Digvijay Singh raked up the issue of Rajnath Singh's alleged meeting with 2008 Malegaon blast accused Pragya Thakur.
He also posed a question to the ruling BJP, wondering what it would say about Sri Sri Ravi Shankar sharing the stage with Naik.
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