At the peak of the crisis last fall, many people who had invested in money market mutual funds lost confidence in those funds and withdrew their money; this loss of funding forced money market mutual funds to reduce their own investments, which in  BIS Review 45/2009  3  turn caused serious problems in the commercial paper market.
The major reason for extraordinary vigilance by RBI is what I would describe as simultaneous volatilities in several globally significant markets, namely, money, credit and currency markets; asset prices; and commodity prices, especially oil and food items.