The District's first director of business and economic development was named yesterday - nine months after the post was authorized by the City Council and 20 years behind the city's suburbs.

Appointed was Knox Banner, 63, who for 18 years has headed Downtown Progress, a private development group that is about to disband.

Banner will be paid $47,500 a year to run the city's new Office of Business and Economic Development, with a staff of five or six and a budget of $300,000.

Selection of Banner, who has close ties to the Metropolitan Washington Board of Trade, was announced by Mayor Walter Washington and City Council Chairman Sterling Tucker at Congress conference.

Tucker and Washington, who are expected to be opponents in next year's race for mayor, yesterday exchanged compliments over the long - sought economic development agency. The mayor credited Tucker with passing the legislation to create the department: the Council chairman praised Washington for filling the job with Banner.

The new agency was authorized in March and the mayor blamed the Civil Service Commission, which must approve new city jobs, for the delay in getting the office going.

The mayor said the mission of the new agency will be "to broaden our involvement in efforts to try to retain and attract business." Tucker said the new city office will create "new economic opportunities.With job needs so great, we need a strong economic thrust."

Washington's major suburbs have had similar agencies for two decades, Prince George's County, which organized its first development agency in 1955, reorganized it three years ago and boosted its budget to $325,000 a year, $25,000 more than the District of Columbia plans to spend.

Almost that much, $275,000, is spent by Fairfax County, which has had a development committee since 1956 and a full-fledged county authority since 1964

Prince George's efforts recently landed a regional data processing center forComputer Sciences Corp., and a new headquarters and warehouse complex built by Hechinger's, which will open next month.

Next spring in Fairfax, work will start on an American Telephone and Telegraph Long Lines office, employing 1,400, and Mobil Oil's domestic marketing and refining headquarters, with 850 workers.

The District of Columbia has not tried to compete for new industry, suburban development officials say, contending that on a dollars-and-cents basis the city will have tough time.

"A whole gamut of taxes are less in the suburbs," said John Sundergill, economic development director in Prince George's. "Across the board, the city is more expensive place to do business."

Added David A. Edwards in Fairfax, "for a business that does not have a [WORD ILLEGIBLE] to be downtown, the suburb is more attractive."

Banner acknowledged that "there are things happening in neighboring [WORD ILLEGIBLE] that are favorable to [WORD ILLEGIBLE] and not the District of Columbia, said the cost of doing business in the District will be one of the first [WORD ILLEGIBLE] his agency studies.

He refused to endorse giving concessions to businesses that move to city, saying "tax incentives [WORD ILLEGIBLE] to come from action by the City Council."

Nor did he endorse restruction in District's gross receipts tax [WORD ILLEGIBLE] suggestion that has been [WORD ILLEGIBLE] by business.