Well if Surnames are banned, why is the name Pichai still used? Genuinely asking. I also see tons of engineers from Tamil Nadu in the US with last names Iyer and Iyengars.
It wasn't banned. It was one of the side effects of the popular Self Respect movement which saw most people switch to patronymical last names from caste-based last names.
Ofcourse the Iyers and Iyengars wouldn't switch because they had more to lose than they gained from hiding their caste identity (they are the so called upper castes who have traditionally held a much priviledged position).
