<param xsi:type="Bank">
     <bankData name="ABC"/>
     <branchAddress id="ABCB1">NY</branchAddress>
     <legalAddress id="ABCL1">UK</legalAddress>
</param>

<xsl:variable name="bankElementSeq" as="element()*">
    <bankData/><legalAddress/><branchAddress/>
</xsl:variable>
<xsl:template match="param/*">
   <xsl:if test="param/@xsi:type='Bank'">
       <xsl:perform-sort select="param/*">
           <xsl:sort select="index-of($bankElementSeq//node-name(.), node-name(.))"/>
       </xsl:perform-sort>
   </xsl:if>
</xsl:template>

<param xsi:type="Bank">
   <bankData name="ABC"/>
   <legalAddress id="ABCL1">UK</legalAddress>
   <branchAddress id="ABCB1">NY</branchAddress>
</param>

<param xsi:type="Bank">
</param>

<xsl:template match="param/*">
   <xsl:if test="param/@xsi:type='Bank'">
       <xsl:perform-sort select="param/*">
           <xsl:sort select="index-of($bankElementSeq//node-name(.), node-name(.))"/>
       </xsl:perform-sort>
   </xsl:if>
</xsl:template>

<xsl:template match="param[@xsi:type='Bank']">
   <xsl:perform-sort select="*">
      <xsl:sort select="index-of($bankElementSeq/node-name(.), node-name(.))"/>
   </xsl:perform-sort>
</xsl:template>

<?xml version="1.0" encoding="UTF-8"?>
<xsl:stylesheet
    version="1.0"
    xmlns:xsl="http://www.w3.org/1999/XSL/Transform"
    xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance">
  <xsl:output method="xml" version="1.0" encoding="UTF-8" indent="yes" />

  <xsl:variable name="bankElementSeq" as="element()*">
    <bankData/><legalAddress/><branchAddress/>
  </xsl:variable>

  <!-- the following pattern restricts the match to exactly the type of param you want to modify -->
  <xsl:template match="param[@xsi:type='Bank']">

    <xsl:copy>
      <xsl:copy-of select="@*"/>
      <xsl:variable name="param" select="."/>

      <!-- iterate over the elements in the sorting order -->
      <xsl:for-each select="$bankElementSeq">
        <!-- and copy the found found by 'local-name' -->
        <xsl:copy-of select="$param/*[local-name() = local-name(current())]"/>
      </xsl:for-each>

    </xsl:copy>
  </xsl:template>

</xsl:stylesheet>