So how do you think Wazirx is running their business, rules and regulations have interpretations and people will find a way that will not directly break the law, if the regulations says that dealing with virtual currencies is illegal and there will be consequences if you overcome that restrictions, then there is a major problem and you might even go to jail for dealing with virtual currencies. Unocoin, Koinex and Zebpay have registered their business with the Indian government and no one will dare to overcome those restrictions even with the interpretations as they might end up in trouble, look at Zebpay now they started their business again as they registered outside and that is the case with Wazirx, you cannot find any detailed information about them, i know they are running from India and they are not having any licence to run the platform in India, if these sort of restrictions are implemented we will see more exchanges popping up in the dark.
  
So the main thing the government has to understand is that, whether they need to have a grip on the situation by allowing registered companies running the platform and the government can monitor the activities or drive everyone underground as you really cannot restrict anyone dealing with virtual currencies.

@legendster, hopefully you understood the difference between illegal to use and restrictions to banks dealing with companies dealing with virtual currencies.