The current problems with Indian cryptocurrency exchanges might be the aftermath of the Reserve Bank of India which issued a statement in September 2017, comparing cryptocurrencies to ponzi scheme, warning people to stay away from virtual currencies such as Bitcoin. RBI claimed that cryptocurrencies are not backed by regulations hence there is a real and heightened risk of investment.
For instance, recently, many users have faced difficulties with INR withdrawals on Koinex, because a conflict between the payment service partner and their bank has caused an indefinite delay in the settlement of a large part of deposits to Koinex in the past 2 weeks.
Regulators world-over, have struggled to understand the underlying blockchain technology and develop an appropriate response to it; and India is no exception. These misgivings have resultantly affected the financial services community, who find it difficult to make up their mind about supporting cryptocurrencies, eventually causing organisations like Koinex and its users to bear the brunt.
Koinex blog post statement
Moreover, Indian crypto exchange Coindelta, also had deposit and withdrawals problems lately due to similar reasons, as reported by Quartz, and the management of three other exchanges confirmed they experienced the same issues.
As soon as RBI clarified that it has not given any licence to any company to deal with Bitcoin or any cryptocurrency, it seems to be the reason why banks and financial institutions are trying to stay away from making any operations with the virtual exchanges.