ORA-28027: privileged database links may be used by global users
Cause : Only users IDENTIFIED GLOBALLY may use a privileged database link.
Action - How to fix it : DBA Scripts :: www.high-oracle.com/scripts
Either change the user to a global user or try to use a different database link.
Well, the reason for above error is that i have taken the above script from a 11g database and running it on 10g database. 11g has bring some changes in password management. Below code is executed on 11g and user created successfully, which is expected result.