diff --git a/rust/processor/src/config.rs b/rust/processor/src/config.rs
index 92a696f68..5a9626b2a 100644
--- a/rust/processor/src/config.rs
+++ b/rust/processor/src/config.rs
@@ -43,6 +43,10 @@ pub struct IndexerGrpcProcessorConfig {
     #[serde(default = "AHashMap::new")]
     pub per_table_chunk_sizes: AHashMap<String, usize>,
     pub enable_verbose_logging: Option<bool>,
+
+    #[serde(default = "IndexerGrpcProcessorConfig::default_grpc_response_item_timeout_in_secs")]
+    pub grpc_response_item_timeout_in_secs: u64,
+
     #[serde(default)]
     pub transaction_filter: TransactionFilter,
 }
@@ -65,6 +69,11 @@ impl IndexerGrpcProcessorConfig {
     pub const fn default_pb_channel_txn_chunk_size() -> usize {
         100_000
     }
+
+    /// Default timeout for grpc response item in seconds. Defaults to 60 seconds.
+    pub const fn default_grpc_response_item_timeout_in_secs() -> u64 {
+        60
+    }
 }
 
 #[async_trait::async_trait]
@@ -85,6 +94,7 @@ impl RunnableConfig for IndexerGrpcProcessorConfig {
             self.per_table_chunk_sizes.clone(),
             self.enable_verbose_logging,
             self.transaction_filter.clone(),
+            self.grpc_response_item_timeout_in_secs,
         )
         .await
         .context("Failed to build worker")?;
diff --git a/rust/processor/src/worker.rs b/rust/processor/src/worker.rs
index c43fef9f7..5bae76224 100644
--- a/rust/processor/src/worker.rs
+++ b/rust/processor/src/worker.rs
@@ -43,8 +43,6 @@ use url::Url;
 // of 50 means that we could potentially have at least 4.8GB of data in memory at any given time and that we should provision
 // machines accordingly.
 pub const BUFFER_SIZE: usize = 100;
-// Consumer thread will wait X seconds before panicking if it doesn't receive any data
-pub const CONSUMER_THREAD_TIMEOUT_IN_SECS: u64 = 60 * 5;
 pub const PROCESSOR_SERVICE_TYPE: &str = "processor";
 
 pub struct Worker {
@@ -63,6 +61,7 @@ pub struct Worker {
     pub per_table_chunk_sizes: AHashMap<String, usize>,
     pub enable_verbose_logging: Option<bool>,
     pub transaction_filter: TransactionFilter,
+    pub grpc_response_item_timeout_in_secs: u64,
 }
 
 impl Worker {
@@ -83,6 +82,7 @@ impl Worker {
         per_table_chunk_sizes: AHashMap<String, usize>,
         enable_verbose_logging: Option<bool>,
         transaction_filter: TransactionFilter,
+        grpc_response_item_timeout_in_secs: u64,
     ) -> Result<Self> {
         let processor_name = processor_config.name();
         info!(processor_name = processor_name, "[Parser] Kicking off");
@@ -117,6 +117,7 @@ impl Worker {
             per_table_chunk_sizes,
             enable_verbose_logging,
             transaction_filter,
+            grpc_response_item_timeout_in_secs,
         })
     }
 
@@ -306,7 +307,8 @@ impl Worker {
         let chain_id = self
             .grpc_chain_id
             .expect("GRPC chain ID has not been fetched yet!");
-
+        let grpc_response_item_timeout =
+            std::time::Duration::from_secs(self.grpc_response_item_timeout_in_secs);
         tokio::spawn(async move {
             let task_index_str = task_index.to_string();
             let step = ProcessorStep::ProcessedBatch.get_step();
@@ -321,6 +323,7 @@ impl Worker {
                     &stream_address,
                     receiver_clone.clone(),
                     task_index,
+                    grpc_response_item_timeout,
                 )
                 .await;
 
@@ -600,9 +603,36 @@ async fn fetch_transactions(
     stream_address: &str,
     receiver: kanal::AsyncReceiver<TransactionsPBResponse>,
     task_index: usize,
+    grpc_response_item_timeout: std::time::Duration,
 ) -> TransactionsPBResponse {
     let pb_channel_fetch_time = std::time::Instant::now();
-    let txn_pb_res = receiver.recv().await;
+    let txn_pb_res = match tokio::time::timeout(grpc_response_item_timeout, receiver.recv()).await {
+        Ok(Ok(res)) => Ok(res),
+        Ok(Err(_)) => {
+            error!(
+                processor_name = processor_name,
+                service_type = PROCESSOR_SERVICE_TYPE,
+                stream_address = stream_address,
+                "[Parser][T#{}] Consumer thread failed to receive transactions",
+                task_index
+            );
+            Err(anyhow::anyhow!(
+                "Consumer thread failed to receive transactions"
+            ))
+        },
+        Err(_) => {
+            error!(
+                processor_name = processor_name,
+                service_type = PROCESSOR_SERVICE_TYPE,
+                stream_address = stream_address,
+                "[Parser][T#{}] Consumer thread timed out waiting for transactions",
+                task_index
+            );
+            Err(anyhow::anyhow!(
+                "Consumer thread timed out waiting for transactions"
+            ))
+        },
+    };
     // Track how much time this task spent waiting for a pb bundle
     PB_CHANNEL_FETCH_WAIT_TIME_SECS
         .with_label_values(&[processor_name, &task_index.to_string()])
@@ -611,15 +641,8 @@ async fn fetch_transactions(
     match txn_pb_res {
         Ok(txn_pb) => txn_pb,
         Err(_e) => {
-            error!(
-                processor_name = processor_name,
-                service_type = PROCESSOR_SERVICE_TYPE,
-                stream_address = stream_address,
-                "[Parser][T#{}] Consumer thread timed out waiting for transactions",
-                task_index
-            );
             panic!(
-                "[Parser][T#{}] Consumer thread timed out waiting for transactions",
+                "[Parser][T#{}] Consumer thread failed or timed out waiting for transactions",
                 task_index
             );
         },