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I need to import bulk number of users and associated groups in the crowd application. Do we have functionality to import their password too or it can be created only in the crowd?
Crowd's CSV importer wizard (part of the Crowd administration UI) will let you import passwords too (documentation: Importing Users from CSV Files). The catch is that either your users' passwords must be unencrypted, or they should be encrypted and stored in exactly the same way that the Crowd directory is storing them in the database.
(Note that I'm using 'encryption' here as a catch all term to cover passwords encoded in some form: generally passwords will be hashed).