The D.C. City Council gave tentative approval last night to legislation that would allow the District to participate in a regional interstate banking arrangement with 11 states.

The measure, approved unanimously, would allow banks in the District and the participating states -- including Maryland and Virginia -- to merge with or acquire banks in the District provided those states extend the same rights to Washington banks. The arrangement is expected to attract additional capital to District-based financial institutions.

Federal law allows the Federal Reserve Board to approve acquisitions and mergers across state lines with the concurrence of the laws in a state or local jurisdiction. The District's legislation is favored by the local banking community and is similar to legislation adopted this year in Maryland and Virginia.

Mayor Marion Barry had wanted the measure to include a clause that would automatically allow full interstate banking in the District after two years. The council voted instead to review the situation after three years and determine at that time whether to permit all 50 states to participate.

The measure adopted last night would go into effect if it is approved by a second council vote, is approved by the mayor and survives a 30-day congressional review.

Although Barry had recommended adoption of the regional banking measure, he raised some objections to proposals calling for the council to require applications and a $4,000 fee from any bank holding company seeking to acquire a bank in the District prior to applying to the Federal Reserve Board. Barry contended that the executive branch, rather than the council, could more effectively enforce the District's interstate banking standards.

As a solution, Barry wanted the council to establish a special office to regulate banks and other financial institutions and authorize him to appoint a superintendent to conduct annual examinations of those institutions and review applications for regional bank holding company acquisitions.

Instead, the council referred Barry's proposal to the Committee on Housing and Economic Development, chaired by Charlene Drew Jarvis (D-Ward 4). Jarvis disagreed with Barry's assessment of the council's role in reviewing applications, but amended the bill acted on last night to require that the $4,000 application fee be paid directly to the D.C. treasurer rather than to the council.

The council also approved the fiscal 1985 supplemental budget that calls for spending $44.8 million more than the amount originally approved by the council. The additional funds would come from an expected increase of $41.3 million in city revenue. Last night, City Council Chairman David A. Clarke said the city has an additional $11.3 million to spend because the city put more funds into the D.C. Retirement Board fund than was required.

The council accepted Clarke's recommendation to reduce the city's contribution to the board by $5.8 million and transfer $3.5 million of the money to help retire the general fund deficit, and the other $2.3 million to fund pay raises for police officers, provided that the council agrees to accept an arbitration panel's ruling that would require higher pay raises for them.

In other action, the council gave initial approval to a bill that would give judges options in sentencing offenders between the ages of 18 and 22. The measure would permit the offenders to be separated from the general prison population and allow them to receive counseling and educational instruction and job training.

Some council members objected to the bill because it does not exclude offenders found guilty of rape. H.R. Crawford (D-Ward 7), who voted against the bill, said that residents of his ward already believe that the court system is too lenient on criminals and that the bill would be "sending the wrong message."

But Wilhelmina J. Rolark (D-Ward 8), chairman of the council's Judiciary Committee, stressed that statistics show that 95 percent of rapes are committed by persons over the age of 22 and that judges would be required to prove that an offender would benefit from counseling and other services.