SBI will withdraw its High Court case and accept alternative land. The state also offered a Future City plot for a data centre. The settlement removes a threat to SBI's government business in Telangana.
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State Bank of India and the Telangana government settled their legal dispute over the Raidurgam land in Hyderabad. The bank will withdraw its case from the Telangana High Court. It will accept an alternative site. The state also agreed to offer an additional plot in the upcoming Future City for a data centre SBI plans to build.
Senior officials from SBI and a state team led by Chief Secretary Ramakrishna Rao met Saturday and signed the agreement. The settlement ends a confrontation that had escalated over the past month.
SBI secured a stay from the High Court earlier in July blocking the auction of the Raidurgam land by the Telangana Industrial Infrastructure Corporation. The land had originally been allotted to the bank. The court order triggered a sharp response from the state government.
The government examined withdrawing its key financial transactions from SBI, according to sources. Chief Minister A Revanth Reddy took the matter directly to the Finance Ministry and SBI's top leadership. The threat carried weight. SBI is the largest banker to state governments in India. It handles tax collections and pension disbursements for state governments. A withdrawal of Telangana's transactions would have hit fee income and deposit balances in the Hyderabad circle, one of the bank's more profitable regions. The settlement removes that overhang.
The additional plot for a data centre is a separate concession. SBI has been expanding its digital infrastructure. A dedicated facility in Future City aligns with the bank's push to centralise data processing and reduce reliance on third-party providers. The location gives SBI access to power and connectivity corridors that other financial firms use for their Hyderabad data centres.
The resolution signals that the Telangana government is willing to negotiate rather than escalate. Other banks with large state government relationships may take note. The dispute had raised questions about the stability of government-bank relationships in the state after the Chief Minister's direct intervention. Those concerns are now largely addressed.
The Raidurgam land itself had been a point of contention for years. SBI had held the allotment since the early 2000s. The state wanted to auction the prime location for commercial development. The alternative site offered to SBI is understood to be in a nearby corridor with similar connectivity. The data centre plot in Future City adds a new asset to the bank's real estate portfolio.
Neither side disclosed the financial terms of the settlement. The agreement was signed Saturday and the bank is expected to file a withdrawal motion in the High Court this week.
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