What is it about some Indian passports? Do they need to have a biometric chip to work? (just checked, and those were introduced in 2024)

Banks worldwide regularly refuse service to people who have US citizenship, so I don't think you're far off on that point.

If I remember correctly there are a dozen variants, and most of them lack a basic feature. I think it's either a signature, latin letters or biometric features.

US citizens also had issues due to FATCA requirements although it seems to have improved since they were introduced.