The RBI certainly hates us :(

Not sure it is partly that or just that. Note: I'm not speaking to defend them as a knee-jerk reaction. There was and still is tons of unaccounted transactions in India (hence the recent cash demonetization, though it has caused lots of issues), and there is also the socialist background and mentality from Nehruvian days of gov't (from soon after independence for many decades, till the 90s), distrust of capitalism (both within and without the country, with a lot of justifications, considering colonialism and hoarding traders later). So there is some (sort of) logical background for all that. I remember reading and hearing (in person) stories from the previous two generations to me, about people going abroad for studies or work, about going to the States with 5 dollars in their pocket (likely exaggerated for effect, but may be a measly 100 or so), camping outside the RBI offices to ask for small amounts of foreign exchange, all sorts of stories. (Rich people taking ill-gotten and unaccounted money outside the country was also a reason for all those rules - so it makes some sort of sense, whether it worked very well or not.) Thing have improved some since them - but not perfect by a long chalk.

The RBI is actually staffed by some pretty well-educated people who tend to act in India's longer term interest - speaking purely as a layman here of course.