Diabetic Retinopathy (DR) is a polygenic disorder issue that affects human eyes. Bruise to the blood vessels of the photosensitive tissue of the retina causes this complication. It's most frequent in patients who had diabetes for more than ten years. This downside is going on in several individuals worldwide. However, the number of medical practitioners and also the tools needed for the detection of DR are very less for serving the mass population. In this paper, we have proposed DRDNet (Diabetic Retinopathy Diagnosis Network), a neural network framework based on capsule networks (CapsNets) for DR diagnosis. Experiments on a dataset with 1,265 images demonstrate that CapsNet shows better accuracy and convergence behavior for the complex data than the state-ofthe-art techniques. The proposed DRDNet performs with an overall accuracy of 80.59% for five class, as compared to the closest competitor with an accuracy of 75.83%. We performed a study on a mixed dataset for two class and found that testing accuracy was 80.59%. We have also done training on a two class model and testing on other unseen datasets. Moreover, we observed that DRDNet has much higher confidence for the predicted probabilities as compared to other state-of-the-art techniques. © 2020 IEEE.