Yesterday the board of the Reserve Bank of Australia confirmed what had become a widely expected decision - to shave another 25 basis points off the official cash rate, taking it to an unprecedented low point of 1.50 per cent.Reserve Bank Governor Glenn Stevens, in his last appearance to deliver an RBA rates decision on behalf of the Board, explained that inflation remained "quite low."What wasn't expected or predicted was the reaction from the banks, notably the major banks. CBA chief executive Ian Narev grabbed first mover status, just five minutes after the RBA statement, announcing it would pass on 13 basis points of the 0.25 per cent cut by reducing its standard variable rate.Beyond that it was variations on a theme, as finder.com noted: NAB became the second major to move, passing on a 0.10 per cent cut. ANZ followed with a 12 basis point cut followed by Westpac with 14 basis points; Bank Australia was the first lender to announce that it would pass on the full 25 basis points; and later that evening, St George Bank also announced a reduction in interest rates across a range of variable lending products for home owners and small businesses, while increasing a range of term deposit rates for savings customers, mostly by 14 basis points - that is, for both residential and investment loans.As our deadline rolled around late last night there were no other major rate changes - expect more today.What this implies is that the Big Four banks have simultaneously decided to trade off some short-term pain by passing on between 40 and 50 per cent of the rate cut while lifting their deposit rates.Initial cries of disappointment from the housing industry were tempered by muffled congratulations from financial planners and others who acknowledged the savers needed to be recognised as much if not more than borrowers.This increase in retail deposit rates is, of course, mixed with a tinge of self-interest as APRA has already flagged it intends to implement the Net Stable Funding Ratio at the beginning of 2018.In that regard, the banks have appeared to offer more. CBA, for instance, upped its one year term deposit rate to three per cent, a rise of 0.55 per cent; its two and three year term deposit rates will lift by 0.50 per cent to 3.10 per cent and 3.20 per cent respectively.This also gives the majors an unexpected advantage - the mutuals have talked themselves into a corner over having to pass on the full cuts.NAB will reduce its variable rate on all new and existing variable rate home loans by 0.10 per cent per annum, effective from Friday 19 August 2016. This means NAB's Variable Rate for Home Loans (Standard Variable Rate) will reduce to 5.25 per cent p.a. The bank's chief operating officer, Antony Cahill, said NAB had carefully considered the needs of customers and shareholders and the current economic and regulatory environment in making the decision. "We have had to strike the right balance between