The body of Mr Jayaram was found in his car near Vijayawada on January 31.
The Andhra Pradesh Police on Wednesday transferred the murder case of Florida-based NRI businessman Chigurupati Jayaram to Telangana.
This was announced by Director General of Andhra Pradesh Police R.P. Thakur. The decision was taken after the police took legal opinion as Mr Jayaram was murdered in Hyderabad but his body was dumped in Andhra Pradesh.
The move came hours after Mr Jayaram's wife Padmashri lodged a case with Jubilee Hills police station in Hyderabad, demanding that they investigate the case as Mr Jayaram was murdered in the city.
The case was transferred to Telangana a day after the Andhra Pradesh Police presented the two accused before media persons.
Rakesh Reddy, a realtor and the main accused, and his driver Srinivas were presented in a court on Wednesday in Nandigama in Krishna district of Andhra Pradesh. The court sent them to judicial custody for 14 days.
The body of Mr Jayaram, 55, who was director of Coastal Bank, was found on the back seat of his car off the national highway near Nandiagama close to Vijayawada on January 31.
The Andhra Pradesh Police said Mr Jayaram was killed over a monetary dispute. It said Mr Reddy murdered Mr Jayaram as the latter had failed to repay a Rs 4 crore loan.