This invention relates to Lipid based Drug carrier system to improve dissolution profile of oral hypoglycaemic and other poorly water soluble drugs. Liposomes are capable of protecting the drugs sensitive to the hostile environment in the gastrointestinal tract, while others have shown that the enzymatic activity in the duodenum and bile salts destroys the lipid bilayers of most types of liposomes, thus releasing the drug. By incorporating the coconut oil as non-polar component in the biosome forming matrices the following advantages are obtained compared to conventional biosome forming matrices prepared with mono-, di- and tri-glycerides as non-polar components. Major fatty acid fraction of coconut oil (Obtained from Cocos nucifera) is rich in octanoate, caprate and caprylate, and contains not less than 95% of the said saturated fatty acids. So triacylglycerides as a whole can be replaced by coconut oil. As it is easily available, cheaper, used as edible oil in cooking the food and has various therapeutic advantages in diabetes and associated cardiovascular diseases.