The method is used to treat diabetic complications such as neuropathy, peripheral neuritis, cataract and retinopathy have shown improvement with flavonoids present in licorice. The improvement was found to be due to the prevention of transformation of glucose to sorbitol by inhibiting aldose reductase enzyme, thus avoiding the accumulation of sorbitol in several tissues including lens, retina, kidney, blood vessels, peripheral nerves and striated muscles. Additionally, licorice prepared by fermentation is rich in amylase which improves diabetic complications due to increase of cellular enzymatic activity. This drug was prepared by fermentation of licorice followed by getting rid of glycerizine using hydrochloric acid and not by boiling for fear of destruction of enzymes and flavonoids.