The development of textile finishing with improved functional properties has been a growing interest among industry and scientists worldwide. The recent global pandemic also enhanced the awareness amongst many toward improved hygiene and the use of antimicrobial textiles. Generally, natural herbal components are known to possess antimicrobial properties which are green and eco-friendly. This research reports a novel and innovative method of developing and optimising nano-emulsions using two combinations of herbal extracts produced from Moringa oleifera, curry leaf, coconut oil (nano-emulsion 1) and other using Aegle marmelos with curry leaf and coconut oil (nano-emulsion 2). Nano-emulsions were optimised for their pH, thermal stability, and particle size, and percentage add-on. Organic cotton fabrics (20 and 60 gsm) were finished with nano-emulsions using continuous and batch processes and characterised for their surface morphology using scanning electron microscopy, energy dispersive X-ray (EDX) analysis and Fourier transform infrared spectroscopy (FTIR) analysis. The finished fabrics were evaluated for their Whiteness Index, assessed for antimicrobial resistance against Gram-positive (Staphylococcus aureus) and Gram-negative bacteria (Escherichia coli) using AATCC 100 and 147 methods. In addition, fabrics were assessed for their antifungal efficacy (AATCC 30), tensile strength and air permeability. Results suggested that finished organic fabrics with nano-emulsions had antimicrobial resistance, antifungal, wash fastness after 20 washing cycles, and sufficient strength. This novel finishing method suggests that organic cotton fabrics treated with nano-emulsions can be used as a durable antimicrobial textile for healthcare and hygiene textiles.