"Payments by VCs, such as Bitcoins, take place on a peer-to-peer basis without an authorised central agency which regulates such payments. As such, there is no established framework for recourse to customer problems / disputes / charge backs etc."
And stopping payments is not the right way to address customer problems.
This incompatibility shows up with Coinbase, where they require a bank account number and a credit card number and identity verification to buy Bitcoin instantly because they're bridging the gap and have no recourse if someone scams them. Not exactly peer-to-peer or anonymous.
Payment companies like credit card issuers or Paypal do a lot of policing of shady vendors and shady customers. If you're just using cash then it's buyer beware. But on the other hand, it allows you to make a payment when a bank wouldn't allow it.
Banks are not invulnerable to hacking.
If you get hustled for your pocket money in the street then the police will have to find the perpetrator with any means at hand. Just because it's an electronic currency does not mean anything is different here.
Are they trying to say that every single Indian citizen could withdraw their money as gold or some equally valuable substance that they can equate to cash money in society?
Wealth truly knows no god and no master, nor any border.
Beware of the propaganda, fear what you don't understand.