Telangana Government Threatens to Move Funds from SBI Over Land Auction Dispute
The Telangana government is considering withdrawing its funds and services from all State Bank of India (SBI) branches in the state, escalating a dispute over the auction of a high-value land parcel in Raidurg's Knowledge City. Officials have initiated the process of collecting details of government deposits, accounts, and transactions maintained with SBI, and are exploring the feasibility of shifting them to other banks if necessary.
SBI operates nearly 1,200 branches in Telangana and handles a significant portion of government employees' salary accounts, as well as disbursements for welfare schemes. Any drastic move could impact payment systems, salary disbursements, and welfare transfers, sources acknowledged.
The dispute centers on a 5.09-acre plot in Raidurg Knowledge City, auctioned by the Telangana Government Industrial Infrastructure Corporation (TGIIC) on June 1. The auction fetched a record ₹1,038.36 crore, at about ₹204 crore per acre. SBI challenged the auction in the High Court, claiming it had purchased the property in 2010 for ₹13.33 crore and still holds possession.
Government officials counter that SBI violated the original allotment terms. The land was granted at a concessional rate for building a corporate office, with a condition to complete development within two years. After taking possession in January 2011, the bank failed to undertake significant construction, prompting multiple notices from the erstwhile Andhra Pradesh Industrial Infrastructure Corporation and later TGIIC. After several extensions, the government rejected a further extension in December 2020 and directed reclamation. TGIIC cancelled the allotment on January 22, 2021, and formally resumed possession on February 1, 2021.
Sources said the government is also probing potential political angles behind SBI's challenge, noting that the bank's senior-most official hails from Wanaparthy in Telangana. However, no official commitment has been made on this aspect.
