Reddy was directed to furnish two sureties of Rs 50,000 each and report at a police station every Sunday till November last week, station Inspector M Mattaiah said.
The former MLA was arrested on September 10 and remanded to judicial custody for 14 days for allegedly obtaining passports for himself and three other persons by claiming that they were his wife, daughter, and son.
A case under the Passport Act, Immigration Act besides sections of the Indian Penal Code (IPC) relating to human trafficking, forgery, and cheating among others had been registered against him.
Meanwhile, the former Congress MLA has claimed the case was politically motivated. He accused caretaker Chief Minister K Chandrasekhar Rao and his nephew Irrigation Minister T Harish Rao of hatching a plan to get rid of him ahead of the state elections.