High real estate costs are forcing many financial services firms to shift their back-office work out of Mumbai.

For instance, ICICI Bank [Get Quote] is building three 30-storey towers of 10 lakh square feet each near the Gujarat International Finance Tec-City in Ahmedabad. While the first tower is under construction, others will be developed in phases.

A spokesperson for the bank said the bank is planning to relocate some of its operations to this facility. "The relocation will depend on cost-effectiveness and without affecting the smooth functioning of existing operations," he said.

The bank already has an office complex in Hyderabad with a seating capacity of nearly 20,000.

ICICI Bank is not alone. Many other banks and financial services companies are planning to implement their office expansion plans outside Mumbai. Indiainfoline is planning a huge office complex for back-office work in Chennai.

Many asset management companies and even some international banks also said they are looking at sites outside Mumbai to set up BPOs (for customer service) and KPOs (for research work) as real estate is available in other cities at much more reasonable rates.

Sanjay Aggarwal, executive director, KPMG, said technology has made it possible for financial services firms to operate at distant locations.

GIFT at Ahmedabad is emerging as an important alternative to Mumbai for such companies. State Bank of India [Get Quote], Union Bank and Kotak Bank have already signed MoUs with the GIFT administration for developing office space there.

Some housing-finance companies and real estate developers are also in talks to build office complexes there.

Sunil Behl, CEO, GIFT, said that, "We are also in talks with commodity exchanges that can shift some of their offices."

He said that GIFT will provide all infrastructure requirements for these companies and IT and ITeS companies. "We have received a lot of response from financial service companies for moving into the GIFT city," he said.

The Gujarat government is also taking many initiatives for creating a healthy pool of talent for such companies.