The Bush administration's plan for reforming the nation's banking system aims at improving its fragile condition, but the proposals would make only a few changes in the way the majority of Americans use banks in their daily lives.

Banks would continue to provide the same services as theyhave all along, with a few possible additions, such as real estate or insurance sales.

Federal insurance for deposits would be changed only slightly, as far as ordinary depositors are concerned. Only someone with more than $100,000 in any one bank would see any change at all, and that would not occur before 1992 at the earliest.

Nevertheless, if the package gets through Congress -- and many observers rate its chances at 50-50 or less -- major changes would be made in the banking system. Broadly speaking, they are intended to encourage bank stockholders to put more of their own money behind the bank in the form of added capital, to give bank regulators new powers to close failing banks before they actually go broke and to allow particularly well-capitalized bank holding companies to engage in new businesses, such as underwriting new stock issues and insurance.

In addition, some companies that have not been allowed to own banks, such as securities firms and companies in regular commercial businesses, would be allowed to buy them. That would expand the number of potential investors in banks and perhaps provide another source of investor money in the capital-short banking system.

Finally, most banks would be allowed to set up branches in other states, rather than just being allowed to own a separate bank or banks there, as is true in most states now. Banks could save money by having branches, since they are less expensive to operate than a separate bank.

Several of the specific proposals would likely make it easier for banks to merge with one another and for banks in one part of the country to acquire institutions in other states. Many analysts believe a consolidation of banks is the only way the industry is likely to be healthy in the long run.

The hope is that all the changes will make the entire banking system more profitable and help stem the large losses some banks, particularly larger ones, have experienced in recent years. If bank losses can be reduced, then so can potential losses by the Federal Deposit Insurance Corp., which steps in when a bank fails to protect insured depositors -- and often uninsured depositors and other creditors as well.

As taxpayers who ultimately provide the backstop for the FDIC insurance fund if it runs out of money, average Americans have a stake in the health of the banking system and thus in all of the elements of the administration's reform package.

Ordinary citizens also have a stake in a healthy banking system because a significant chunk of the U.S. economy, including most small- or medium-sized businesses, rely on it for financing. The system's current problems have caused a substantial number of larger institutions to cut back their lending activity -- the so-called credit crunch, which Federal Reserve Chairman Alan Greenspan has said was a major cause of the current recession.

As depositors, though, the American public has much less at stake because the changes proposed by the administration for deposit insurance will affect only those with more than $100,000 in one or more accounts in a single bank, not counting up to $100,000 in retirement-type accounts such as an individual retirement account.

Today, an individual can have several accounts at a single bank with each account insured up to $100,000, so long as each account is different -- for instance, an individual account, a joint account with a spouse, a retirement account, a trust account, an unincorporated business account and so on.

The administration yesterday proposed limiting insurance coverage to a total of $100,000 per individual per bank. And in each case, the depositor also would have insurance on a total of $100,000 in retirement accounts at each institution.

The current rules would remain in effect for two years after the proposal is enacted, so any change at all would not come before 1992 at the earliest.

Originally, administration officials wanted to limit insurance coverage to a $100,000 total in all banks, plus an additional $100,000 for all retirement accounts in banks. But there was heated opposition from the American Bankers Association and other banking groups and the officials backed off. Instead, the administration wants a study of the feasibility of such a system-wide limitation, which the FDIC has said would be extremely costly to enforce.