The differentiation could be on account of capital requirement, scope of activities or area of operations. As such, they offer a limited range of services / products or function under a different regulatory dispensation. The concept is not entirely new.
In fact, and in a  BIS central bankers’ speeches  3  sense, the UCBs, the PACS, the RRBs and LABs could be considered as differentiated banks as they operate in localized areas. 17.