Back in April 2018, the Reserve Bank of India (RBI) started prohibiting Indian banks from providing assistance or services to cryptocurrency businesses.

Following this rule that took effect in July 2018, both Kotak Mahindra Bank and Digibank have updated their terms in their customers' contract, prohibiting them from using their accounts for cryptocurrencies of any kind, forcing customers to declare that they "will not deal with any transactions related to cryptocurrency including Bitcoins."

It also stated that the banks have the rights to close customer accounts if there is a breach in the given terms and conditions.

The banks made it clear that they cannot be in any relationship on behalf of customers to any trader or broker that deal in digital assets, and informed affected individual’s account that they will be shut within 30 days.

The banks are also displaying the following message on the ATM screens:

According to the banks, they are working in accordance with the RBI regulations.

RBI’s controversial banking blockade has sparked both public and industry-led petitions, with some reaching the judiciary. Acknowledging this rule, many cryptocurrency traders are trying to advise India cryptocurrency users to trade using peer-to-peer (P2P) to avoid issues with their local banks and government authorities.

Previously, reports in late December suggested that India's government could affirm cryptocurrency's legality, with certain restrictions.

And earlier this January 2019, the RBI published its financial report for 2017-2018, which concluded that cryptocurrency doesn't pose any threat to the government's financial stability.

However, the authorities across the country continue to persistently warn the public against the risks associated with unregulated cryptocurrency investments.

The news of the account closures has received little attention within Indian media. The country has also experienced one its largest employment disputes in its history with an estimated 200 million employees within the public services, communications and agriculture sectors going on a 48 hour strike in an attempt to improve general working conditions.

According to the report, people in India aged between the age of 15 and 34 are expected to hit 480 million by the year 2021, with the country being ranked as one of the world’s fastest growing economies.

But still the country's economic prospects remain poor.