However, once the differentiated banks are licenced, there would be a need for having a different regulatory and supervisory approach specific for such banks depending on the specialization. It also needs to be ensured that there is no scope for regulatory arbitrage across different types of banks. Multiple regulations and complexity in regulations 45.
Also, there may be a need for more types of regulations for differentiated banks because of the different products lines, service offerings, clientele, areas and modus operandi of doing business. Multiple regulations need to work in tandem to ensure effective regulation.