Birds are banded when they are very young to identify the breeder and to designate that they are domestically raised. At a very young age, the breeder is able to slip the band over the foot. I have seen numerous cockatiels, canaries and keets present with leg bands that are too tight, cutting off the blood supply to the foot. These bands must be removed - and they can be very difficult to cut off. Birds can lose their foot if the blood supply is severely damaged as a result of a constricting leg band.
Open bands are even more dangerous.
The bird can chew on the band tightening it. Conversely, the band can open and catch on items in the cage. These bands should be removed. For legal purposes, carefully save the band and information about it's removal. If a bird is caged, be certain that the bars don't narrow near the top.