A credit crunch is a decrement in the whole accessibility of credit or advances. It can likewise be depicted as a sudden fixing of important states of gaining an advance from the banks. Otherwise called credit emergency, credit crunch is normally connected with the decrement of the credit accessibility unprejudiced of an addition in authority interest rates. In circumstances of this nature, the connection between accessibility of credit and interest rates has changed certainly, such that either credit turns out to be difficult to get at a certain official interest rate, or an obvious connection between credit accessibility and interest rates stops to be there. This paper is going to analyze the reasons for the credit crunch and the disappointment of corporate administration and its... regulations in taking care of the emergency.