After a week of tense exchanges between the Telangana government and the State Bank of India (SBI) over the auction of Raidurgam land, signs of reconciliation are emerging.

Senior SBI officials held extensive consultations with Chief Secretary K. Ramakrishna Rao following the government’s threat to escalate the matter to the Centre, RBI and even reconsider its banking ties with SBI.

Sources indicate the bank has in principle agreed to accept an alternative 2.5‑acre plot offered by the Telangana Government Industrial Infrastructure Corporation (TGIIC) in Hyderabad Knowledge City. Another parcel elsewhere in the city is also being considered as part of the settlement.

The controversy dates back to 2010, when five acres were allotted to SBH at a concessional rate of ₹13.3 crore, despite a market value of nearly ₹200 crore. No construction followed, and after SBH’s merger into SBI in 2017, delays persisted.

In May 2019, TSIIC recommended cancellation, and despite repeated requests from SBI for more time, the government finally cancelled the allotment on January 22, 2021, citing violation of norms that required construction within two years. SBI challenged the cancellation in the High Court, while the government offered alternative land in Osman Nagar and Gandipet. The government cancelled the allotment in 2021 and in June 2026 auctioned the land, fetching ₹204 crore per acre.

SBI challenged the auction in the High Court, claiming ownership, prompting Chief Minister A. Revanth Reddy to allege political motives behind the move. Officials noted SBI had earlier signalled approval for the auction, making its legal challenge surprising. “It is surprising that after the auction, they chose to raise a hue and cry and even challenged the government auction in the court,” official sources pointed out.

With the Chief Minister and Chief Secretary engaging in high‑level talks in New Delhi, SBI has now indicated willingness to withdraw its petition and accept the alternative land. The government, apparently satisfied, is said to have decided against harsh measures such as withdrawing deposits, shifting salary accounts, or removing SBI as lead bank in the State. The patch‑up, if finalised, would end a long‑running dispute and restore working relations between the State and India’s largest public sector bank.