Security is an important aspect of an information system in terms of its confidentiality, integrity and availability. Relational Databases are more and more remotely accessed and shared through the network because of growing economical value of the data in the real world. Cryptography and Watermarking are two kinds of security mechanisms, but cryptography does not provide posteriori protection to the data. Watermarking appears as an interesting security mechanism that can provide copyright protection and ownership verification of the data. Watermarking of relational databases is one of the fastest growing areas of research. This paper proposes a new method for increasing the capacity and privacy of watermarking based on circular histogram modulation by taking the host system as colour image. By increasing the capacity it can be beneficial for secure transmission of huge databases like hospital records through the network.