Nov. 28 (Bloomberg) -- Goldman Sachs Group Inc. won approval for a New York State banking license to transform into a bank holding company and take deposits.

Goldman Sachs Bank USA will have its headquarters in New York City, the New York State Banking Department said today in a statement.

Goldman, which was the biggest U.S. securities firm before converting to a bank holding company in September, applied in October to become a full-service, state-chartered bank instead of a national bank like rival Morgan Stanley. Goldman was one of nine major U.S. banks that received a total of $125 billion under the U.S. government’s $700 billion rescue plan for the financial industry.

“The decision to select a New York charter reflects confidence in New York as a financial center and in its Banking Department as an effective regulator,” Richard Neiman, New York’s superintendent of banks, said in the statement.

Goldman Sachs’ current Utah-based industrial loan company will merge into its New York-state chartered trust company, Goldman Sachs Trust Co., which will in turn become a full-service New York bank with trust powers.

Goldman Sachs spokeswoman Melissa Daly declined to comment.

To contact the reporter on this story: Josh Fineman in New York at jfineman@bloomberg.net;

Last Updated: November 28, 2008 17:26 EST