Banks are scared by the popularity of crypto among the new and small investors - they don't have big capital as a result many of them want to earn high quickly, 1 or 2 investors with a capital of 10,000 Rs don't make a difference to the market but what about 100,000 investors each withba capital of 10000 Rs, it is quite a big amount of money, this type of money can affect the market.

The bank don't want their business to be affected so they decide to destroy the root of the problem - crypto exchange - since, they are the one which provide easy access of crypto to these small investors.

India is considered to be the second largest currency trading market in the, now imagine what will happen if all the countries currency is replaced with crypto, the government will loose its power, all the bank and financial institutions will fail, the economy will collapse - this fear of collapsing of economy made Indian government to put the restriction on crypto regarding buying and selling.

As long as government and banks exist, It is near impossible for crypto to replace fiat money. We too use fiat money to buy crypto from exchange and then the exchange uses fiat money to pay for various bill regarding cost of making or mining crypto, and deposits the profits in to account with bank or use their resources to convert profits into crypto, this creates a cycle of circulation of money, thus makes it difficult for crypto to replace fiat money.