Controversial tycoon Vijay Mallya's claim of pursuing a one-time settlement with lenders of Kingfisher Airlines (KFA) by paying 50% of his dues has been rejected by banks, which say they have not received any such offer. "Till date, we have not received any concrete offer for a settlement from Mallya," said the chief of a bank which has a large exposure to KFA. With most of the lenders being in the public sector, bankers say that a one-time settlement, which typically includes a waiver, would be difficult. But banks are hopeful of recovering half of their dues through attachment of assets. A senior official with a bank that has a Rs 800-crore exposure said, "Given that Mallya is now a declared wilful defaulter and that the investigative agencies are now involved, I expect that recoveries can only take place through a court order and a process involving auction of assets."

SBI Caps Trustee Company will auction the airline's erstwhile headquarters 'Kingfisher House', which is situated near the Mumbai Airport, on March 17. The Supreme Court this week had raised questions on how banks could advance large sums without adequate security. Banks had in 2009 advanced loans against a pledge of the KFA brand, which, they said, was valued at Rs 4,111 crore, according to a valuation conducted by Grant Thornton. The O P Bhatt-led SBI was the head of the consortium that lent to KFA.

On Sunday, the liquor baron said in a statement that banks have already recovered Rs 2,494 crore and that he was making efforts to reach a one-time settlement with them. This settlement would be based on additional payments to the lenders. The total exposure of banks to Kingfisher Airlines was around Rs 7,000 crore as of 2014. Since then, banks have sold Rs 1,244 crore worth of United Breweries shares.

Mallya said that another Rs 600 crore was deposited with the Karnataka HC. An additional Rs 650 crore, which is the surplus generated from selling shares of United Spirits obtained as security by one of the lenders out of the consortium, has also been deposited with the Karnataka HC. Bankers say that Mallya himself had provided a list of assets worth over Rs 1,000 crore.