The issue is that I tried with a USB which was not at all encrypted which was not getting mounted when connected.
Based on teh policy we have, any USB connected it should encrypt 50% of the space which will be then classified as "Business data" and remaining as "Non business data". However, in this case with MAC its not happening.
Moreover, today I observed that the USB eventhough didnt showup in the desktop once connected, if you visit the Utilities>>Disk Utility, I could see the USB to be mounted. And I was able to access the USB from there.
But was able to only copy the data from the USB to MAC, but was not able to copy anything to teh USB.
Neither couldn't find any partitions such as "Business data" or "Non business data".... it was a simple USB connected as it is.
Really cant find whats wrong.