Banks are ready to trim lending and deposit rates following the 0.50 per cent repo rate cut on Saturday and the Reserve Bank of India's mandate to continue with the 'soft interest rate bias.'

Major banks like State Bank of India, Bank of Baroda, Bank of India, Corporation Bank, UCO Bank and United Bank of India are viewing their cost of deposits and lendings to decide on the future rates.

"We will cut both lending and deposit rates. We will decide the issue with the committee dealing with asset-liability and decide on the future rates," UCO Bank chairman V P Shetty said.

Bankers might cut rates by 0.25-50 per cent depending on their cost of funds.

Banking sources said that housing loan rates may also slide further as there was still room for reduction.

While banks are offering housing loans at 7.5-8.0 per cent for short maturity loans, housing finance companies have pegged it at about 8.5-9.0 per cent.

The expected rate cut follows a 0.50 per cent reduction in repo rate by the Reserve Bank last Saturday.

Repo rate cut was long pending considering the 0.25 per cent bank rate cut in April slack season Credit Policy and the excess liquidity to the tune of Rs 50,000 crore (Rs 500 billion) in the banking system.