Bitcoin/Blockchain is of interest to law enforcement agencies, tax authorities, and legal regulators, all of which are trying to understand how the cryptocurrency fits into existing frameworks. The legality of your bitcoin activities will depend on who you are, where you live, and what you are doing with it.
At India, bitcoin is still unregulated, but the government is keen in making use of Blockchain for banks/financial institutions use, you can visit below link to know more view from RBI.,
Even banks are getting adapted to blockchain for it's financial transaction use cases.,
Recently, on 5th Jan 2017, the team formed by RBI has released a white paper on Bitcoin/Blockchain Technology.