Liquor baron and loan defaulter Vijay Mallya has been granted bail by the Westminster Magistrates’ Court, three hours after he was arrested in London, according to sources.

Vijay Mallya was arrested by Scotland Yard police in London on Tuesday. He was presented before a court in Westminster, from where he was granted bail.

Earler, after Mallya's arrest British authorities have informed the Central Bureau of Investigation (CBI) about the arrest.

Mallya was aressted on India’s request for extradition for defaulting on multi-crore bank loans here in India has entered UK’s legal system.

Mallya, who earned the moniker of “the King of good times”, owes over `8,000 crore to Indian public sector banks. So far, the banks have been able to recover only a fraction of it. According to the Finance Ministry, Mallya has an outstanding loan of `8,000 crore and the banks have recovered `155 crore by auctioning his seized property.

With the government showing the willingness to go after him, the owner of the now-defunct Kingfisher Airlines had offered to negotiate a one-time settlement on the loan default.