Telangana Government and SBI Move Toward Settlement Over Raidurgam Land Dispute

After a week of tense exchanges between the Telangana government and the State Bank of India (SBI) over the auction of prime land in Raidurgam, signs of reconciliation have emerged. Senior SBI officials held extensive consultations with Chief Secretary K. Ramakrishna Rao following the government’s threat to escalate the matter to the Centre and the Reserve Bank of India, and even to reconsider its banking ties with SBI.

Sources indicate that 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 the then State Bank of Hyderabad (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, the Telangana State Industrial Infrastructure Corporation (TSIIC) recommended cancellation. 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 later auctioned the original land in June 2024, fetching ₹204 crore per acre. SBI challenged the auction in the High Court, claiming ownership. Chief Minister A. Revanth Reddy alleged political motives behind the move, while officials noted SBI had earlier signalled approval for the auction, making its legal challenge surprising.

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