The face-off assumes significance as SBI is the principal banker to the Telangana Government and handles a substantial portion of its financial transactions

What began as an ordinary civil dispute between the State Bank of India (SBI) and the Telangana Government over a five-acre parcel in Hyderabad’s Raidurgam area is now snowballing into a confrontation with potentially significant financial implications for both sides.

SBI on Friday secured a stay from the Telangana High Court on the auction of the land by the Telangana Industrial Infrastructure Corporation (TGIIC), which had earlier allotted the property to the bank.

The legal action by the country’s largest lender has not only disappointed the State Government but has also triggered concerns over the possible fallout for both the bank and the government.

According to senior government officials, the litigation has come at a time when the cash-strapped State is attempting to mobilise resources and is being viewed as an attempt to impede those efforts.

“While the issue of ownership and the auction is now sub judice, other options are being worked out to express the Government’s displeasure,” a senior official told businessline .

According to government records, the land was allotted to SBI in 2010 by the erstwhile Andhra Pradesh Industrial Infrastructure Corporation (APIIC) in undivided Andhra Pradesh. After the formation of Telangana in 2014, the State Government repeatedly reminded the bank to commence construction on the site, failing which the land would have to be resumed in accordance with the allotment norms.

final notice

TGIIC subsequently approached the Government in 2019 and 2020 seeking approval to repossess the land. Despite a final notice issued in 2020, SBI did not commence construction.

The corporation eventually auctioned the land, which fetched a record price of about ₹237 crore an acre. SBI challenged the move, contending that the land had been acquired through an outright sale without any conditions and, therefore, could not be resumed by the government.

The face-off assumes significance as SBI is the principal banker to the Telangana Government and handles a substantial portion of its financial transactions.

Among the options being considered by the State to register its displeasure is the shifting of some deposits and salary accounts to other public sector banks, a move that could have financial implications for SBI, according to sources.

SBI is also the convenor of the State Level Bankers’ Committee (SLBC) for Telangana.

With the disputed property now estimated to be worth about over ₹1000 crore, the eventual outcome of the legal battle could result in a substantial financial loss for one of the two parties.

Published on June 21, 2026