Just looked at the updated RBI FAQ, and it clearly says OCI/PIO need not apply.
https://www.rbi.org.in/Scripts/FAQView.aspx?Id=122
6. Is the facility available to Overseas Citizens of India (OCI)/Persons of Indian Origin (PIO)?
No, the facility is not available to OCIs/PIOs.
Also sneaky is the reference to the FEMA regulations in terms of the limits:
While there is no monetary limit for exchange for the eligible Resident Indians, the limit for NRIs will be as per the relevant FEMA Regulations.
The 25k limit is mentioned in the circular with the required forms, and an email ID to complain is provided:
5. RepresentationAny person, aggrieved by the refusal of the Reserve Bank to credit the value of SBNs tendered, may represent to the Central Board of the Reserve Bank within fourteen days of the communication of such refusal to him. Such representations should be addressed to the Central Board, Reserve Bank of India, Secretary’s Department, Central Office Building, 16th Floor, Shahid Bhagat Singh Marg, Mumbai – 400 001. The representation may also be
[email protected].
https://www.rbi.org.in/Scripts/Notif...808&Mode=0#ANN