Yes, that is one of the reasons as Banks are seeing crypto currencies as a direct competitor of their business. However, the main reason behind this ban is the over reserved mentality of Indian government. For every new thing related to money, they show a negative view at first and then slowly adopt it. The same thing will happen for bitcoin too. The way blockchain technology is progressing, no governments will be able to keep themselves blind for longer time. It has to be adopted to be prepared for the future.

Also one funny explanation given by one of the senior officials of Indian government is that, the government is worried about the possible tax evasion. In a country of 1.3 billion people, the number of taxpayers are only 12.5 million. People are not paying taxes anyway. What change crypto will make in that scenario. It's laughable! The banking cartel is opposing it and government is listening to them.