Raidurg land auction case: Telangana govt weighs future dealings with SBI

The Telangana government is weighing the option of withdrawing deposits and discontinuing services with the State Bank of India after the bank challenged the Raidurg land auction in the High Court. The dispute centres on five acres originally allotted to the erstwhile State Bank of Hyderabad, with the court staying further proceedings.

Hyderabad: After suffering a major setback, the Telangana government is reportedly considering withdrawing its deposits and discontinuing services with the State Bank of India (SBI) in retaliation against the bank approaching the High Court over the recent Raidurg land auction, sources said.

The Telangana Government Industrial Infrastructure Corporation (TGIIC) auctioned five acres of land in Raidurg on May 28. The auction fetched a record Rs.237 crore per acre. However, SBI filed two writ petitions alleging that the government had auctioned land that had earlier been allotted to the bank.

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The dispute pertains to Plot No. 1A, measuring five acres in Survey No. 83/1 of Hyderabad Knowledge City at Raidurg. The land was allotted to the erstwhile State Bank of Hyderabad in 2010 for the establishment of a banking office complex.

Following the merger of State Bank of Hyderabad with SBI in 2017, the bank proposed setting up an Advanced Capability Centre and Innovation Centre on the site.

The issue escalated after TGIIC conducted the auction, prompting SBI to challenge the move before the High Court. The court subsequently stayed further proceedings in the matter. With the controversy attracting attention and putting the government on the defensive, officials are said to be examining various options.

Sources indicated that the government is considering withdrawing its deposits and discontinuing services routed through SBI branches across Telangana. Details relating to government deposits, transactions and services handled by the bank are reportedly being compiled.

Apart from routine challan collections and treasury transactions, SBI also handles the payment of salaries to government employees and pension disbursements. The volume of these transactions runs into several crores of rupees every month.

Officials believe that any decision to curtail banking arrangements with SBI could have implications for salary payments, pension disbursements and certain welfare programmes that rely on Direct Benefit Transfer mechanisms. Such a move could also raise concerns among government employees, pensioners and welfare scheme beneficiaries as well, they stressed.