The permission "setall" need to be given on the remote queue for the user who is accessing the remote queue.
From OSB, MQ transport is configured for accessing MQ through a server connection channel.
In MQ server, while creating the server connection channel, a user will be defined for the property MCAUSER. Normally this user will be having the permission to access the MQ server. The "setall" permission has to be given to the remote queue for this user. This need to be provided by MQ administrator.
It worked fine after giving this permission.