"I think in next six weeks, interest rates are expected to come down. I think interest rates would be adjusted on their own," ICICI Bank CEO and MD K V Kamath said on the sidelines of a CII function.

In the recent days, many banks have reduced one-year deposit rates by 2 per cent. HDFC Bank [Get Quote] has also slashed interest rates on personal and commercial vehicles by up to 150 basis points.

The bank will also cut interest rates on corporate loans and wholesale credit, a move that will benefit small and medium enterprises and large companies.

Kamath, hinting at possible rate cuts said that the banks are also looking at passing it on to the customers. "With the lowering of borrowing cost the banks will start lending at lower cost," he said.

With inflation declining sharply in the recent weeks and slowing demand, the Reserve Bank may signal softer interest rates even though it may not tinker much with key rates in the quarterly review of its annual monetary policy to be released on January 27.

Bankers feel that the RBI may maintain a status quo in their key rates as the Central Bank has already brought down CRR and short-term rates to inject Rs 3,00,00-crore liquidity into the system.

After hiking its signalling rates till October last year, the apex bank began slashing its cash reserve ratio, repo and reverse repo rates, to support growth. The RBI has reduced its CRR to 5 per cent, repo to 5.5 per cent and reverse repo to 4 per cent.