Sufayan Zafar was accused of financing Rs 14,800 for Mumbai attack and providing Rs 3.98 million to co-accused Shahid Jameel Riaz prior to the attack.

"The FIA has found no evidence against Zafar during investigation," an official of FIA said.

He said the allegation that he had financed one of the arrested suspects in Mumbai case could not be proved after thorough investigation. The official said: "Zafar's role in providing finances to a Mumbai attacks suspect(s) has not been established."

He said Zafar would not be charge-sheeted in the court for alleged allegations. "FIA will submit a challan in the trial court in this regard on next hearing on September 22 but will not frame charges against him," the official said.

Zafar was hiding after being declared proclaimed offender in the Mumbai case. He was arrested early last month from his hideout in Kyber-Pakhtaunkhawa province. A resident of Gujrawala district of Punjab, some 80km from Lahore, Zafar is among 21 other (absconding) suspects wanted in this high-profile case.

Six other suspects - Abdul Wajid, Mazhar Iqbal, Hammad Amin Sadiq, Shahid Jameel Riaz, Jamil Ahmed and Younus Anjum–have been lodged in the Adiyala Jail Rrawalpindi since 2009 for abetment to murder, attempted murder, planning and executing the Mumbai attacks. Prime suspect LeT operations commander Zakiur Rehman Lakhvi, believed to be the mastermind of the Mumbai attacks, has been in hiding after getting bail over a year ago.