Thanks for your reply Dick.
We are at DB2 ver 8.1 . The problem is encountered when a commit statement is executed after an update statement in batch but the same query runs fine in an online scenario. Also, the update/commit statements work fine at times and fails with -901 at times. This seems to be a DB2 system problem. I suppose the a ticket needs to be opened with IBM in this regard so that they can provide an appropriate PTF to fix this. Please correct me if Iam wrong.