The U.S. Court of Appeals has handed down a ruling that will make it easier for foreign banks to locate and operate in the United States.

The case was originally brought by the Conference of State Bank Supervisors and the Attorney General of New York to challenge a decision by the Comptroller of the Currency involving applications from five Australian banks and a British bank for federal charters in New York and Illinois. The supervisors are responsible for regulating state-licensed banking institutions.

Two earlier judgments by the U.S. District Court were upheld in favor of the comptroller and one was reversed against the agency. The appeals tribunal decided the agency had the authority to grant federal charters to foreign banks locating in states where reciprocity is the law.

There are no U.S. banks in Australia, but the decision would allow Australian banks with federal charters to do business in this country despite state laws.

The court also decided that a British bank in the state of Washington had the right to conduct business operations, such as making domestic loans and offering trust services, that are not permitted foreign banks operating with a Washington state charter.

Finally, the court held that the comptroller's office had misinterpreted the 1978 International Banking Act when it allowed federal agencies of foreign banks to accept deposits from persons who are neither citizens nor residents of the United States. Agencies, unlike branches, are not allowed to accept deposits.

A spokesman for the banking supervisors said the group is still considering whether to appeal the ruling to the Supreme Court.