When Mayor Marion Barry's administration recently asked financial institutions to sponsor events surrounding a Chinese trade show here this week, only one District banker offered to hold a reception at his home, while Citicorp, the New York banking company, agreed to spend $40,000 for an elaborate opening gala at the Washington Convention Center.

Citicorp's one-upmanship typifies the vastly different approaches being taken by the New York giant and local banks in an intense lobbying battle over whether Citicorp and other money-center banks should be granted banking licenses here. One District banker working against Citicorp's entry into this market characterized the dispute as a "dogfight."

Normally, such lobbying would have ended after the D.C. City Council gave final approval on Sept. 10 to an interstate banking bill that would allow banks in the District to merge with institutions in 11 southeastern states on a reciprocal basis.

In approving the measure, the council rejected a so-called "trigger" provision that would allow banks outside the region to obtain licenses here after two years. The council did not consider a Citicorp proposal that would allow outside financial institutions to come in sooner if they demonstrated a commitment to financing economic development projects in the District.

Before the vote, Citicorp tried to win over council members with a pledge to provide $100 million in mortgage and business loans in exchange for a banking license. Citicorp claims that this would result in the creation of 5,000 permanent jobs. Since the council's action, Citicorp has stepped up its efforts to win acceptance for its offer -- encouraged by Barry's position in support of a "trigger" and early entry provisions and growing speculation that the mayor may veto the banking bill.

Citicorp's philosophy is "do the right thing and make sure you get credit for it," said Lucius P. Gregg, a Citicorp vice president who began a second round of private meetings with council members immediately after the council's final vote.

Citicorp officials have solicited suggestions from council members for projects in their wards that could benefit from Citicorp loans. Also, they have responded to doubts and questions raised by council members and critics with written answers and brochures listing projects involving millions of dollars that Citicorp has invested in other urban areas.

In contrast, local bankers have taken a relatively low-key approach since declaring the council vote a victory. D.C. bank presidents and board chairmen who previously walked the halls of the District Building in search of votes now are counting on what they consider to be a respectable record of local investments and their longstanding presence in the community to offset Citicorp's financial clout and sophisticated public relations campaign.

District bankers argue that the regional interstate banking bill approved by the council will give the local banks time to grow before they are faced with stiff competition from the large influential institutions known as money-center banks.

"Local bankers are real live people whom you deal with daily and believe," said Luther Hodges, chairman and chief executive officer for the National Bank of Washington. "Citicorp is just words. Citicorp has been making money out of this town for years and now they say they want to do something for us. Words are cheap."

The "something" that the Barry administration believes Citicorp can help do is to transform Washington into a financial center and spur revitalization of the city's outlying and economically deprived areas. City officials say banks in the District have been reluctant to invest in far Southeast and Northeast Washington.

"We can't go on protecting the local guys because they are local guys, especially if they are not lending money in our wards," said City Council member Frank Smith (D-Ward 1), who tried unsuccessfully to amend the banking bill to include a trigger provision. "We are all stung by the arrogance of the banking community and the disdain with which they treat the outlying areas of the city."

City Council Chairman David Clarke said Citicorp's promise to finance economic development projects in the District "is something that needs to be looked at." He said the offer came too late for council members to give it serious consideration before their final vote on the banking issue.

In its current campaign, Citicorp is pledging to develop a binding agreement in which it would provide $100 million in mortgage and business loans within three years or suffer certain fines and penalties.

According to Gregg, the $100 million in loans would provide $30 million for Ward 8 housing projects, $20 million for economic development in Ward 7, $20 million to revitalize small businesses along the H Street corridor in Ward 6 and $30 million in additional financing for development of Gallery Place, a major downtown commercial project that is controlled by minorities.

Citicorp, the nation's largest bank holding company, has total assets of $140 billion, compared to the combined assets of about $14 billion for the District's 21 banks.

In May, the Metropolitan Washington Planning & Housing Association released figures showing that in 1981 and 1982, wards 2 and 3 in Northwest Washington received 46 percent of all housing loans made in the District while only 8.9 percent of the loans went to wards 7 and 8 in Southeast Washington, which have a higher concentration of minorities and poor people.

The statistics were compiled from a survey of lending practices in the Washington area by the Woodstock Institute, a Chicago-based policy and research organization.

Council members critical of the local banks' performance said those institutions have supplied little concrete information about their lending practices. Local bank officials defend their performance but concede that more can be done to assist redevelopment here.

American Security, the city's second largest bank, provided city officials with information showing that it made $35 million in real estate loans for multifamily housing in the District in 1984 and the first seven months of this year. The bank has taken the lead in financing $439 million worth of commercial real estate projects and has 215 employes who have put in more than 13,000 hours of volunteer work for community projects and organizations.

"Part of our problem is getting them city officials to understand what we have been doing and what we are capable of doing," said Daniel J. Callahan III, chairman of American Security. "I don't think we have seen and been exposed to enough viable projects for those outlying areas. We are very willing to sit down and structure viable loans for any area in the city."

Callahan said he does not know what Barry wants from local bankers and that bankers who met with the mayor before the council's vote were stunned when he suggested that Citicorp and the other money-center banks be granted banking licences if they made an economic commitment to the city.

At his news conference last week, Barry said that he wanted local banks to increase the number of minorities on their boards, increase loans to residents and businesses east of the Anacostia River and other outlying areas, and "match" Citicorp's offer.

Callahan said that he has requested a meeting with Barry and that American Security plans to increase its lending activity in some areas of the city.

At the urging of City Council member Charlene Drew Jarvis (D-Ward 4), the D.C. Bankers Association already has pledged to contribute $1.1 million to $1.5 million to the District's newly formed Neighborhood Economic Development Corp. and to take the lead in encouraging other businesses to contribute between $3.5 million and $3.9 million.

Citicorp's current financial involvement in the District includes $300 million in outstanding loans to commercial real estate projects, $100 million in lines of credit to local businesses and $40 million in outstanding car loans and residential mortgages.

Gregg said Citicorp's analysis shows that the District is a particularly attractive market for a money-center bank because it has a large international community, a population that is well educated and a large pool of residents -- 39 percent of the total -- who earn more than $25,000 a year.

Gregg maintains that Citicorp's experience in investing in other urban areas would give it a leg up in getting involved in revitalization projects in Washington that local banks have found to be too risky.

"You have got to know how to work in partnership with the government, and you can't nickel and dime it," Gregg said. "You have to put enough into it to get the momentum going."

But some council members still have doubts about whether Citicorp would live up to its promises.

City Council member Betty Ann Kane (D-At Large) stressed that by law, accepting deposits is the only banking activity that Citicorp currently is prevented from doing. If the giant corporation wanted to make loans it could do so now, she said.

"What Citicorp wants to do is deceptively attractive," she said. "I don't see it as a commitment. I see it as a bribe. Not a personal one, but a public bribe."

Council member H.R. Crawford (D-Ward 7), whose ward stands to receive $20 million in Citicorp loans if the New York banking firm gets its way, said he is not impressed by the offer.

"It is admirable but I don't believe it," said Crawford. "I'm for giving the local banks the first shot. There has not been anything there to encourage them. Now, with Citicorp's offer, it will make a difference."

On the other hand, council members John Ray (D-At Large) and Smith said they have urged Barry to veto the banking bill and said the District could benefit by getting commitments that will make a difference in the city.

"The argument that we ought to give them local bankers a measure of protection translates into allowing them to cut their deals, with their mergers and all that, before the big money-center banks come in," Ray said. "Once this law is passed they are not going to need the District government."