A copy of bitcoin standing on PC motherboard is seen in this illustration picture, October 26, 2017. Picture taken October 26, 2017.REUTERS/Dado Ruvic

After the government declared that the cryptocurrency is not legal tender in India, banks have started initiating measures to discourage it, by not allowing their credit and debit cards to be used for the virtual currency transactions. Citi India, the banking arm of Citi Group, on Tuesday banned the use of its debit and credit cards for the purchase of bitcoins and other cryptocurrencies.

The move is in line with Reserve Bank's warning over cryptocurrencies. "Given (the) concerns, both globally and locally including from the Reserve Bank of India, cautioning members of the public regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with bitcoins, cryptocurrencies, and virtual currencies, Citi India has decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, cryptocurrencies, and virtual currencies," the Economic Times quoted from a Citi Bank statement. 

Banks including SBI, ICICI Bank, HDFC Bank, Axis Bank and Yes Bank have already suspended accounts of major bitcoin exchanges in the country in January 2018.

There were reports that in the US, JPMorgan Chase & Co., Bank of America Corp and Citigroup Inc. also barred purchases of bitcoin and other cryptocurrencies on their credit cards.

In the UK, Lloyds Banking Group which includes Halifax, MBNA, and Bank of Scotland have also banned credit card customers from buying bitcoin, reports The Guardian.

While presenting Union Budget this year, Finance Minister Arun Jaitley declared the government's stand on cryptocurrencies. The FM said that government does not consider crypto-currencies as legal tender or coin and will find ways to curb the virtual currencies from financing illegal activities.

Earlier in 2017 the RBI also flagged that they had not provided any authorization or license to an entity or company to operate with bitcoins or deal with cryptocurrency.