This is interesting. So your brother thinks that in the near future the RBI will say that Buying bitcoin is a crime.

Bitcoins will be the same as cocaine or .. well in India sex toys also share similar status.

I personally find it quite unlikely that a democratic country will prohibit it's citizens from transacting in something like bitcoin. But hey, crazier things have been known to happen.

However, I'd like to ask. Why preemptively assume that bitcoin will be declared illegal ?

I can understand that the RBI is conservative and they forced Paypal to create automatic bank account withdrawals, etc. Basically move everything into their system so that people cannot store huge sums of money in their Paypal accounts.

But how would they go about outlawing bitcoin ? I'm curious about the technical as well as political aspects of such an event.

I think countries like Germany and Singapore may have been the first to realize that there isn't really much you can do to 'ban' bitcoin. You just have to play ball and then come up with solutions as problems come up. A move like China wouldn't be possible in Germany (maybe in Singapore though.. yes..).