Bank holding companies would be able to buy healthy savings and loan institutions under a rule proposed yesterday by the Federal Reserve Board.

The rule, which would expand existing regulations that permit bank companies to buy failing S&Ls, would further blur the line separating commercial banks and S&Ls. That distinction has been eroding for more than a decade as banks -- which have traditionally specialized in commercial and medium-term loans -- and S&Ls -- which traditionally have specialized in home loans -- have sought ways to invade each other's turf.

"The {proposed} rule certainly contributes to the breaking down of barriers to banking," said John H. Rousselot, president of the National Council of Savings Institutions, an S&L lobby group.

"It shows a recognition of what's happening in the marketplace," he said.

The Fed, which regulates companies that own full-service banks, will make a final ruling on the proposal after a 60-day public comment period.

The proposal would allow federal banking regulators to sell S&Ls before they are declared to be troubled or insolvent, giving federal officials greater leeway in handling potentially shaky institutions, according to congressional banking committee aides.

"It's prophylactic to a certain degree," said Richard Peterson, aide to Rep. Doug Barnard Jr. (D-Ga.)

It also would help infuse more capital into the S&L industry at a time when the industry faces record failures and heavy losses at many institutions, the aides said. The banking industry, which is also suffering from record failures, is considered much healthier than the S&L industry.

A broader capital base would provide a stronger source of insurance premiums for the beleaguered Federal Savings and Loan Insurance Corp., the federal fund that guarantees S&L deposits up to $100,000.

Many financial lobby groups praised the proposed rule, but said its passage would not be as radical a step as it would have been several years ago, when bank companies were pushing for such a rule as a way to buy financial institutions across state lines. Since then, many states have passed laws allowing bank companies to buy banks across state lines.

Federal law gives S&Ls greater freedom than banks to sell insurance and invest in real estate, but the Fed restricts an ailing S&L's activity in those markets when the institution is purchased by a bank holding company.

The Fed is considering whether the restrictions should be lifted, a Fed spokesman said, but, in any event, is expected to impose the same limitations on healthy and ailing S&Ls purchased by bank holding companies.

Patrick A. Forte, president of the Association of Thrift Holding Companies, an S&L lobby group, said that the proposed rule would "greatly widen" the number of potential purchasers of S&Ls, which in turn will "raise the value of a thrift charter."

Congress recently passed a law to allow S&L holding companies to acquire healthy S&Ls across state lines.

"We now need to modify the law so that thrift holding companies may acquire banks," Forte said.

"We're in the position of not being able to buy stock in a bank although they could buy us under this proposed rule."

The Federal Home Loan Bank Board, the federal agency that regulates S&Ls, said yesterday that it could not comment on the proposed rule because "the Fed did not consult us on this matter, and we haven't seen the proposal.