HYDERABAD

The State government is considering withdrawing its funds and services from all State Bank of India (SBI) branches in Telangana, and is also looking into possible political dimensions over the escalating dispute on the high-value land auction in Raidurg’s Knowledge City.

Sources revealed to The Hindu that the State government has initiated the process of collecting details of government deposits, accounts, and transactions maintained with SBI in Telangana. Senior officials are also examining the feasibility of shifting government accounts and deposits to other banks if the situation warrants such a move. The SBI enjoys a substantial presence in Telangana, operating nearly 1,200 branches across the State. A significant portion of government employees maintain salary accounts with the bank, while SBI also plays a major role in disbursing welfare scheme benefits.

Sources acknowledge that any drastic decision affecting the government’s relationship with SBI could have implications for payment systems, salary disbursements and welfare transfers. Given the seriousness of the conflict, the possible political angle behind the SBI’s decision is also being probed. Sources claimed that the senior-most official of the SBI hails from Wanaparthy in Telangana, and the government suspects some political angle to the SBI’s decision to challenge the government’s auction. “We are not committing ourselves on the political angle, but we suspect such a challenge wouldn’t be possible despite the SBI being on a sticky wicket,” an official claimed, seeking anonymity.

The dispute centres on a 5.09-acre parcel of land in Raidurg Knowledge City, which was auctioned by the Telangana government Industrial Infrastructure Corporation (TGIIC) on June 1. The auction generated a record revenue of ₹ 1,038.36 crore, with the land fetching nearly ₹ 204 crore per acre, one of the highest rates recorded in the region. However, SBI challenged the auction before the High Court, contending that it had purchased the property in 2010 for ₹ 13.33 crore and that the land remains in its possession.

Government officials, however, allege that the bank violated the terms and conditions of the original allotment. According to officials, the land was allotted at a concessional rate for the construction of a corporate office and related facilities, with a condition that development should be completed within two years. After the sale agreement and taking possession of the land in January 2011, the bank made no significant construction activity, forcing the then Andhra Pradesh Industrial Infrastructure Corporation and later TGIIC to issue a series of notices.

After several extensions, the government, in December 2020, rejected a proposal for further extension and directed that the land be reclaimed. Subsequently, TGIIC cancelled the allotment on January 22, 2021, and formally resumed possession of the land through a panchanama on February 1, 2021, officials explained.