The present disclosure relates to a pharmaceutically acceptable herbal composition effective for control and management of diabetes. The composition further essentially comprises of at least a part of Ocimum americanum, as active ingredient along with an additional herb and at least one pharmaceutically acceptable carrier and solvent. The present disclosure further demonstrates the efficacy of herbal composition in controlling blood glucose level and acting as a prophylaxis against associated disorders. The present disclosure further provides process of preparing such herbal composition for treatment and management of diabetes.