The debate over national interstate banking or regional interstate banking versus the status quo in Maryland has evolved into an exercise in semantics.

As a special committee which Maryland Gov. Harry Hughes appointed to study interstate banking learned last week, competition can mean a good deal more or less than it appears. Like beauty, banking competition in Maryland is in the eye of the beholder.

Take New York's giant Citicorp, for example. Last week's testimony by a Citicorp official to the committee underscored the dichotomy over the nature of competition. What probably stood out most in last week's discussion of competition, however, was the irony in Citicorp's interpretation.

Already a formidable competitor in the financial services field in Maryland, Citicorp wants the state to approve a national interstate banking measure that would open the door to banks from all over the country. Maryland's bankers, on the other hand, support a proposal calling for an alignment with a group of states in a regional interstate reciprocal agreement.

Several states have adopted legislation approving regional pacts, with the obvious aim of preventing money-center banks from gaining control of banking assets in those states. Citicorp and other money-center banking institutions argue that regional interstate agreements would mean less competition and hurt economic growth.

"The threat to Maryland's banks is not other banks, 'money-center' or foreign. The threat is competition," said Ronald Geesey, president of Citicorp Financial Inc. If Maryland banks can't meet this competition, then consumers in the state will have to "pay the price of the banks' inefficiency by giving them protected status," Geesey said in a statement to the committee on interstate banking.

It's unlikely that that exercise in splitting hairs will materially change the view of competition held by Maryland's banking industry. Nor is it likely to have an immediate impact on the committee or the General Assembly. Citicorp and Maryland aren't exactly "banking partners," as Citicorp claimed in a brochure not long ago.

It is Citicorp's own claims about its success in Maryland, in fact, that cause the state's banking industry to flinch at the mention of competition.

Two years ago, Citicorp boasted that loan volume in Maryland made it the ninth largest "bank" in the state. Although uneasy about Citicorp's increasing presence, Maryland's banking industry helped it lobby successfully last year for passage of a bill that allows out-of-state banks to operate limited banking facilities in the state. From that unholy alliance came Citibank Md. (N.A.), which opened in Towson in July.

Although Citicorp is prohibited from actively seeking deposits in Maryland, it has lent more than $500 million in the state, including a large loan to Bethlehem Steel to modernize its Sparrows Point plant, Geesey disclosed last week. In confirming those figures yesterday, a spokesman also pointed out that Citicorp has made loans totaling several million dollars for commercial development in downtown Baltimore.

Meanwhile, Maryland-based Citicorp Financial -- a consumer services financial company in Towson -- has captured a substantial share of the state's credit card business. Its CHOICE credit card operation claims 450,000 cardholders in Maryland. "We own an equal share in [Maryland] with VISA and MasterCard," a Citicorp Financial spokesman said yesterday.

What's more, Citicorp Financial will begin offering consumers several private-label credit cards, probably within a year, the spokesman said.

In all, Citicorp employs more than 1,000 persons in Maryland, making it one of the largest employers among banking institutions in the state. Its loan volume in Maryland, meanwhile, "is expanding by the day," a spokesman noted.

Not fast enough, apparently. Citicorp wants a license to do more business in the state. "We're doing business to a degree, but unlike Sears, K mart and Merrill Lynch, we don't have total access to the market," a spokesman complained. "Our only access is through the [CHOICE] credit card and a limited-service bank. We're regulated, and we can't take local deposits and fund businesses here in Maryland. We have to import those funds. Like Sears, we have products and services we'd like to offer" in Maryland.

Given its present position in Maryland and its expansionist goals, it's little wonder that Citicorp sees competition in a different light than the state's banking industry.