Announcing her decision, US Magistrate Judge Nan Nolan told Rana, "I am sure you would be disappointed. But you have to keep doing the best you are doing".
After the hearing, Rana shook hands with his lawyer and was handcuffed before he was taken out of the court.
Nolan ruled that Rana is a "risk of flight" since he maintains strong family ties with Canada where his father and siblings live and "has some but not substantial ties to the US".
Rana was arrested by the FBI in October on charges that he was helping co-conspirator David Coleman Headley plot an attack on a Danish newspaper.
US prosecutors filed fresh papers yesterday that claim that 48-year old Rana "knew in advance" of the 26/11 Mumbai terror strikes and "complimented" terror outfit Lashkar-e-Taiba on the attacks.
Rana, who runs an immigration business and grocery store in the city, has travelled extensively outside the US, going to countries like Dubai, China, India, UK, Germany and Saudi Arabia and has a lot of international contacts, Nolan added.
With a net worth of USD 1.6 million, Rana also has "significant financial resources", which could be used if he has to fly out of the country, the Judge said.
Deccan Herald is on WhatsApp Channels| Join now for Breaking News & Editor's Picks