diff --git a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/serialization/LoanTransactionValidator.java b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/serialization/LoanTransactionValidator.java
index 317babae0bc..a15efeb0f95 100644
--- a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/serialization/LoanTransactionValidator.java
+++ b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/serialization/LoanTransactionValidator.java
@@ -152,11 +152,9 @@ public void validateDisbursement(JsonCommand command, boolean isAccountTransfer,
             validateLoanClientIsActive(loan);
             validateLoanGroupIsActive(loan);
 
-            if (loan.isChargedOff() && DateUtils.isBefore(actualDisbursementDate, loan.getChargedOffOnDate())) {
-                throw new GeneralPlatformDomainRuleException("error.msg.transaction.date.cannot.be.earlier.than.charge.off.date", "Loan: "
-                        + loan.getId()
-                        + " backdated transaction is not allowed. Transaction date cannot be earlier than the charge-off date of the loan",
-                        loan.getId());
+            if (loan.isChargedOff()) {
+                throw new GeneralPlatformDomainRuleException("error.msg.loan.disbursal.not.allowed.on.charged.off",
+                        "Loan: " + loan.getId() + " disbursement is not allowed on charged-off loan.");
             }
 
             boolean isSingleDisburseLoan = !loan.getLoanProduct().isMultiDisburseLoan();
diff --git a/integration-tests/src/test/java/org/apache/fineract/integrationtests/ClientLoanIntegrationTest.java b/integration-tests/src/test/java/org/apache/fineract/integrationtests/ClientLoanIntegrationTest.java
index a7490ce99f8..8f8b7a6ff59 100644
--- a/integration-tests/src/test/java/org/apache/fineract/integrationtests/ClientLoanIntegrationTest.java
+++ b/integration-tests/src/test/java/org/apache/fineract/integrationtests/ClientLoanIntegrationTest.java
@@ -6362,7 +6362,15 @@ public void chargeOff() {
                                 .locale("en").dateFormat(DATETIME_PATTERN));
             });
             assertEquals(403, exception.getResponse().code());
-            assertTrue(exception.getMessage().contains("error.msg.transaction.date.cannot.be.earlier.than.charge.off.date"));
+            assertTrue(exception.getMessage().contains("error.msg.loan.disbursal.not.allowed.on.charged.off"));
+
+            exception = assertThrows(CallFailedRuntimeException.class, () -> {
+                errorLoanTransactionHelper.disburseLoan((long) loanID,
+                        new PostLoansLoanIdRequest().actualDisbursementDate("7 September 2022").transactionAmount(new BigDecimal("10"))
+                                .locale("en").dateFormat(DATETIME_PATTERN));
+            });
+            assertEquals(403, exception.getResponse().code());
+            assertTrue(exception.getMessage().contains("error.msg.loan.disbursal.not.allowed.on.charged.off"));
 
             LOAN_TRANSACTION_HELPER.makeLoanRepayment((long) loanID, new PostLoansLoanIdTransactionsRequest().dateFormat(DATETIME_PATTERN)
                     .transactionDate("07 September 2022").locale("en").transactionAmount(5000.0));