First of all I would like to thank you for your kind reply. I tried changing the extension, but it did not help. When I launched arcmap, new same template is again created. It's not a template issue. The arcmap starts, shows initializing application, then loading document and then before the window could open, the application exits by itself. Would restoring my windows to a previous time, when arcmap was working fine, help? Or is there anything else that I could try first?