Bhogaraju Pattabhi Sitaramayya founded Andhra Bank in 1923 in Machilipatnam, Andhra Pradesh. Raja Yarlagadda Sivarama Prasad was the individual who committed the financial resources for starting the institution. The bank was registered on 20 November 1923 and commenced business on 28 November 1923 with a paid up capital of and an authorised capital of . In 1956, linguistic division of States was promulgated and Hyderabad was made the capital of Andhra Pradesh. The registered office of the bank was subsequently shifted to Andhra Bank Buildings, Sultan Bazar, Hyderabad. In the second phase of nationalisation of commercial banks commenced in April 1980, the bank became a wholly Government-owned. In 1964, the bank merged with Bharat Lakshmi Bank and further consolidated its position in Andhra Pradesh.