It is quite some time since the sub-prime crisis popularly known as mortgage crisis /mess came to attention in the U.S. it is imperative for us in India to analyse the causes of the crisis, its anatomy& consequences so as to ensure that similar mistakes are not committed in Indian economy. It is pertinent to note that in its semi-annual Global Financial Stability Report released on April 8, 2008, the International Monetary Fund (IMF) said that falling U.S. housing prices and rising delinquencies in the residential mortgage market could lead to losses of $565 billion. When combining these factors with losses from other categories of loans originated and securities issued in the United States related to commercial real estate, IMF puts potential losses at about $945 billion. This was the first time that IMF has made an official estimate of the global losses suffered by banks and other financial institutions in the U.S. credit crunch that began in 2007 amid the rising number of defaults on subprime home loans. The incredible $945 billion estimate of losses, made in March, represents approximately &142 per person world wide and 4 percent of the $23.21-trillion credit market. IMF noted in its report that global banks likely will carry about half of these losses.