New Delhi, April 7

Indian banks have rejected an offer by embattled liquor baron Vijay Mallya to repay part of the $1.4 billion loans his defunct Kingfisher airline owes them, a lawyer for the lenders told the Supreme Court today.

Last week, Mallya, who had guaranteed the Kingfisher loans, proposed to pay INR 40 billion ($602 million) to the lenders by September, and INR 20 billion more if Kingfisher wins a lawsuit seeking damages from plane engine-maker International Aero Engines.

Shyam Divan, a lawyer representing the banks, told the Supreme Court that Mallya had made the lenders a revised offer on Wednesday but that this was still not acceptable to them. He did not give details of the revised offer, but said the banks would need a ‘substantial amount’ to be deposited for a dialogue to begin.

A spokesman for UB Group, a company owned by Mallya, declined to comment immediately.

The court has sought a response from Mallya by April 21 to the banks’ demands, setting the next hearing date for April 26.