The State Bank of India has secured a stay from the Telangana High Court on the auction of a valuable five-acre parcel in Hyderabad's Raidurgam area, escalating what began as a routine civil dispute into a significant confrontation. According to reports from The Hindu BusinessLine, SBI's legal action has disappointed the State Government and triggered concerns about potential fallout for both parties. The bank's challenge contends that the land, allotted to SBI in 2010 by the erstwhile Andhra Pradesh Industrial Infrastructure Corporation, was acquired through an outright sale without conditions and cannot be resumed by the government.
The disputed property is now estimated to be worth over ₹1000 crore, with the Telangana Industrial Infrastructure Corporation (TGIIC) having auctioned the land for a record price of approximately ₹237 crore per acre. As reported by The Hindu BusinessLine, after the formation of Telangana in 2014, the State Government repeatedly reminded SBI to commence construction on the site, failing which the land would have to be resumed. Despite a final notice issued in 2020, SBI did not commence construction, leading to TGIIC's decision to auction the property.
The face-off assumes particular significance given SBI's role as the principal banker to the Telangana Government and its handling of substantial portions of the state's financial transactions. According to sources cited by The Hindu BusinessLine, SBI serves as the convenor of the State Level Bankers' Committee (SLBC) for Telangana, making the dispute potentially more complex than a typical land dispute. The eventual outcome of the legal battle could result in substantial financial losses for either party.
Senior government officials have indicated that while the ownership and auction issues are now sub judice, other options are being considered to express the Government's displeasure. As reported by The Hindu BusinessLine, among the options being considered is the shifting of some deposits and salary accounts to other public sector banks, which could have financial implications for SBI. The government views the litigation as coming at a time when the cash-strapped state is attempting to mobilise resources.
