The present disclosure relates to a process for catalyst assisted production of crude bio-oil from biomass, which involves heating a mixture of biomass slurry and a catalyst at a temperature ranging from 200 to 350° C. and at a pressure ranging from 70 to 250 bars to obtain a mass containing the crude bio-oil. The crude bio-oil is separated from said mass to obtain a separated crude bio-oil. The catalyst being soluble in water is recovered from the aqueous phase and is reused for the preparation of crude bio-oil from biomass.