diff --git a/RELEASE.md b/RELEASE.md
index 366ab3a5fd..be53347946 100644
--- a/RELEASE.md
+++ b/RELEASE.md
@@ -17,6 +17,7 @@
 * Updated CLI command `kedro catalog resolve` to read credentials properly.
 * Changed the path of where pipeline tests generated with `kedro pipeline create` from `<project root>/src/tests/pipelines/<pipeline name>` to `<project root>/tests/pipelines/<pipeline name>`.
 * Updated ``.gitignore`` to prevent pushing Mlflow local runs folder to a remote forge when using mlflow and git.
+* Fixed error handling message for malformed yaml/json files in OmegaConfigLoader.
 
 ## Breaking changes to the API
 * Methods `_is_project` and `_find_kedro_project` have been moved to `kedro.utils`. We recommend not using private methods in your code, but if you do, please update your code to use the new location.
diff --git a/kedro/config/omegaconf_config.py b/kedro/config/omegaconf_config.py
index 6b67e047b7..2145ad3331 100644
--- a/kedro/config/omegaconf_config.py
+++ b/kedro/config/omegaconf_config.py
@@ -317,7 +317,7 @@ def load_and_merge_dir_config(  # noqa: PLR0913
                 line = exc.problem_mark.line
                 cursor = exc.problem_mark.column
                 raise ParserError(
-                    f"Invalid YAML or JSON file {Path(conf_path, config_filepath.name).as_posix()},"
+                    f"Invalid YAML or JSON file {Path(config_filepath).as_posix()},"
                     f" unable to read line {line}, position {cursor}."
                 ) from exc
 
diff --git a/tests/config/test_omegaconf_config.py b/tests/config/test_omegaconf_config.py
index 3ec2b39074..676963ee18 100644
--- a/tests/config/test_omegaconf_config.py
+++ b/tests/config/test_omegaconf_config.py
@@ -307,12 +307,15 @@ def test_multiple_nested_subdirs_duplicates(
         assert re.search(pattern_nested_local, str(exc.value))
 
     @use_config_dir
-    def test_bad_config_syntax(self, tmp_path):
-        conf_path = tmp_path / _BASE_ENV
-        conf_path.mkdir(parents=True, exist_ok=True)
-        (conf_path / "catalog.yml").write_text("bad:\nconfig")
-
-        pattern = f"Invalid YAML or JSON file {conf_path.as_posix()}"
+    @pytest.mark.parametrize("config_path", ["catalog.yml", "subfolder/catalog.yml"])
+    def test_bad_config_syntax(self, tmp_path: Path, config_path):
+        conf_env_path = tmp_path / _BASE_ENV
+        conf_env_path.mkdir(parents=True, exist_ok=True)
+        conf_path = conf_env_path / config_path
+        conf_path.parent.mkdir(parents=True, exist_ok=True)
+        (conf_env_path / config_path).write_text("bad:\nconfig")
+
+        pattern = f"Invalid YAML or JSON file {conf_env_path.as_posix()}"
         with pytest.raises(ParserError, match=re.escape(pattern)):
             OmegaConfigLoader(
                 str(tmp_path), base_env=_BASE_ENV, default_run_env=_DEFAULT_RUN_ENV