Telangana Government May Cut Ties With SBI Over Raidurg Land Auction Dispute
The Telangana government is considering withdrawing its deposits and discontinuing key banking services with the State Bank of India (SBI) following a legal dispute over a land auction in Raidurg. The move, reported on June 19, 2026, comes after the High Court stayed proceedings on the auction of five acres of land in Hyderabad Knowledge City at Raidurg, which the state government had recently auctioned.
The conflict began after the Telangana Government Industrial Infrastructure Corporation (TGIIC) auctioned Plot No. 1A, measuring five acres in Survey No. 83/1 of Hyderabad Knowledge City, on May 28. The auction fetched a record-breaking Rs. 237 crore per acre.
However, SBI filed two writ petitions in the High Court, challenging the auction. The bank argued that the state government had auctioned land that had already been allotted to the bank. The property was originally allotted to the erstwhile State Bank of Hyderabad in 2010 to establish a banking office complex. Following the merger of the State Bank of Hyderabad with SBI in 2017, the bank planned to build an Advanced Capability Centre and Innovation Centre on the site.
After the High Court stayed further proceedings on the auction, the Telangana government began examining retaliatory options. Sources indicated that officials are compiling details of government deposits, transactions, and services handled by SBI branches across the state, with the intention of potentially withdrawing these funds and discontinuing services.
SBI currently manages substantial state transactions, including routine challan collections, treasury operations, and monthly salary and pension disbursements for government employees. The volume of these financial activities runs into several crores of rupees every month.
State officials noted that halting relations with SBI could impact direct benefit transfers for welfare programmes, salary payments, and pension disbursements. Such a disruption could trigger concerns among government employees, pensioners, and welfare beneficiaries throughout Telangana.
