New Delhi, March 17 (IANS) Neo banks and mid-sized banks are increasingly opening Global Capability Centres (GCCs) in India, following the example of larger global banking giants, according to a report.

This growing trend is being viewed as a major shift in India’s banking, financial services, and insurance (BFSI) sector, signalling new opportunities for the industry in the country.

Neo banks, which operate solely online without the need for physical branches, are playing a significant role in this transformation, the report said.

These digital-only banks often work independently or form partnerships with traditional banks to provide innovative banking services.

The market for neo banks is expected to grow significantly in the coming years. According to the report by PwC, the neo-banking market is projected to reach a value of $395 billion by 2026, a huge jump from $19 billion in 2018.

This rapid growth reflects the increasing adoption of digital banking services globally and the potential for India to become a major hub for banking innovation and services.

As more neo banks and mid-sized financial institutions set up their operations in India, the country’s role in the global banking landscape is becoming even more prominent.

However, according to a recent report by real estate consultancy Anarock, GCCs leased over 52.88 million square feet of office space in the last two years - 2023 and 2024 - across these cities.

As the presence of GCCs in the country is growing rapidly, these centres now account for 37 per cent of the office space market in the country’s top 7 cities.

The demand for office space from GCCs has been especially strong in cities like Bengaluru, Hyderabad, Chennai, and Pune.

Bengaluru leads the pack, with around 24 million square feet of office space leased, which makes up nearly half (46 per cent) of the total leasing in the top 7 cities.

Hyderabad follows with over 10 million square feet leased, accounting for about 19 per cent of the total space leased by GCCs, the ANAROCK report added.