The present invention provides bioartificial pancreas for releasing insulin comprising a composite hollow fiber membrane (HFM) consisting of polysulfone and Vitamin E polyethylene glycol succinate (ETPGS) wherein said HFM encapsulates an insulin producing cellular moiety and has a porosity blocking passage therethrough of immunogenic agents and permitting passage therethrough of nutrients for said cellular moiety and the insulin produced thereby. The present invention also provides a process for preparing the bioartificial pancreas.