The Reserve Bank of India (RBI, the central bank) has been working to contain liquidity problems in the banking system. The RBI introduced a series of measures after banks' daily borrowing from the central bank's repurchase (repo) auctions rose to around Rs1trn (US$22bn) in November. In its mid-quarterly review of monetary policy on December 16th the RBI kept key interest rates unchanged but reduced the statutory liquidity ratio (the percentage of deposits that banks are mandated to keep in the form of government securities) by 1 percentage point, to 24%, with effect from December 18th in a bid to inject liquidity into the system. The liquidity constraints are the result of tighter monetary conditions in an economy that has been growing at a rate close to or above its non-inflationary potential. The cash crunch was expected to worsen as companies readied themselves to pay the third instalment of their advance tax, estimated at US$11.1bn in total, by the deadline of mid-December.