diff --git a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/serialization/LoanProductDataValidator.java b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/serialization/LoanProductDataValidator.java
index 433fcf630c7..9fbd578f159 100644
--- a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/serialization/LoanProductDataValidator.java
+++ b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanproduct/serialization/LoanProductDataValidator.java
@@ -342,9 +342,9 @@ public void validateForCreate(final JsonCommand command) {
         // Validating whether the processor is existing
         loanRepaymentScheduleTransactionProcessorFactory.determineProcessor(transactionProcessingStrategyCode);
 
+        Long delinquencyBucketId = null;
         if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.DELINQUENCY_BUCKET_PARAM_NAME, element)) {
-            final Long delinquencyBucketId = this.fromApiJsonHelper.extractLongNamed(LoanProductConstants.DELINQUENCY_BUCKET_PARAM_NAME,
-                    element);
+            delinquencyBucketId = this.fromApiJsonHelper.extractLongNamed(LoanProductConstants.DELINQUENCY_BUCKET_PARAM_NAME, element);
             baseDataValidator.reset().parameter(LoanProductConstants.DELINQUENCY_BUCKET_PARAM_NAME).value(delinquencyBucketId)
                     .ignoreIfNull().integerGreaterThanZero();
         }
@@ -785,6 +785,13 @@ public void validateForCreate(final JsonCommand command) {
                     .extractBooleanNamed(LoanProductConstants.ENABLE_INSTALLMENT_LEVEL_DELINQUENCY, element);
             baseDataValidator.reset().parameter(LoanProductConstants.ENABLE_INSTALLMENT_LEVEL_DELINQUENCY)
                     .value(enableInstallmentLevelDelinquency).ignoreIfNull().validateForBooleanValue();
+            if (delinquencyBucketId == null) {
+                if (enableInstallmentLevelDelinquency) {
+                    baseDataValidator.reset().parameter(LoanProductConstants.ENABLE_INSTALLMENT_LEVEL_DELINQUENCY).failWithCode(
+                            "can.be.enabled.for.loan.product.having.valid.delinquency.bucket",
+                            "Installment level delinquency cannot be enabled if Delinquency bucket is not configured for loan product");
+                }
+            }
         }
 
         String loanScheduleType = LoanScheduleType.CUMULATIVE.name();
@@ -1301,9 +1308,9 @@ public void validateForUpdate(final JsonCommand command, final LoanProduct loanP
                     .integerZeroOrGreater();
         }
 
+        Long delinquencyBucketId = null;
         if (this.fromApiJsonHelper.parameterExists(LoanProductConstants.DELINQUENCY_BUCKET_PARAM_NAME, element)) {
-            final Long delinquencyBucketId = this.fromApiJsonHelper.extractLongNamed(LoanProductConstants.DELINQUENCY_BUCKET_PARAM_NAME,
-                    element);
+            delinquencyBucketId = this.fromApiJsonHelper.extractLongNamed(LoanProductConstants.DELINQUENCY_BUCKET_PARAM_NAME, element);
             baseDataValidator.reset().parameter(LoanProductConstants.DELINQUENCY_BUCKET_PARAM_NAME).value(delinquencyBucketId)
                     .ignoreIfNull().integerGreaterThanZero();
         }
@@ -1770,6 +1777,13 @@ public void validateForUpdate(final JsonCommand command, final LoanProduct loanP
                     .extractBooleanNamed(LoanProductConstants.ENABLE_INSTALLMENT_LEVEL_DELINQUENCY, element);
             baseDataValidator.reset().parameter(LoanProductConstants.ENABLE_INSTALLMENT_LEVEL_DELINQUENCY)
                     .value(enableInstallmentLevelDelinquency).ignoreIfNull().validateForBooleanValue();
+            if (delinquencyBucketId == null) {
+                if (enableInstallmentLevelDelinquency) {
+                    baseDataValidator.reset().parameter(LoanProductConstants.ENABLE_INSTALLMENT_LEVEL_DELINQUENCY).failWithCode(
+                            "can.be.enabled.for.loan.product.having.valid.delinquency.bucket",
+                            "Installment level delinquency cannot be enabled if Delinquency bucket is not configured for loan product");
+                }
+            }
         }
 
         String loanScheduleType = loanProduct.getLoanProductRelatedDetail().getLoanScheduleType().name();
diff --git a/integration-tests/src/test/java/org/apache/fineract/integrationtests/CustomSnapshotEventIntegrationTest.java b/integration-tests/src/test/java/org/apache/fineract/integrationtests/CustomSnapshotEventIntegrationTest.java
index e8b9e335928..bfbb3242dcc 100644
--- a/integration-tests/src/test/java/org/apache/fineract/integrationtests/CustomSnapshotEventIntegrationTest.java
+++ b/integration-tests/src/test/java/org/apache/fineract/integrationtests/CustomSnapshotEventIntegrationTest.java
@@ -64,7 +64,6 @@ public void testSnapshotEventGenerationWhenLoanInstallmentIsNotPayed() {
             // Create Loan Product
             PostLoanProductsRequest loanProductsRequest = create1InstallmentAmountInMultiplesOf4Period1MonthLongWithInterestAndAmortizationProduct(
                     InterestType.FLAT, AmortizationType.EQUAL_INSTALLMENTS);
-            loanProductsRequest.setEnableInstallmentLevelDelinquency(true);
             PostLoanProductsResponse loanProductResponse = loanProductHelper.createLoanProduct(loanProductsRequest);
 
             // Apply and Approve Loan
@@ -112,7 +111,6 @@ public void testNoSnapshotEventGenerationWhenLoanInstallmentIsPayed() {
             // Create Loan Product
             PostLoanProductsRequest loanProductsRequest = create1InstallmentAmountInMultiplesOf4Period1MonthLongWithInterestAndAmortizationProduct(
                     InterestType.FLAT, AmortizationType.EQUAL_INSTALLMENTS);
-            loanProductsRequest.setEnableInstallmentLevelDelinquency(true);
             PostLoanProductsResponse loanProductResponse = loanProductHelper.createLoanProduct(loanProductsRequest);
 
             // Apply and Approve Loan
@@ -169,7 +167,6 @@ public void testNoSnapshotEventGenerationWhenWhenCustomSnapshotEventCOBTaskIsNot
             // Create Loan Product
             PostLoanProductsRequest loanProductsRequest = create1InstallmentAmountInMultiplesOf4Period1MonthLongWithInterestAndAmortizationProduct(
                     InterestType.FLAT, AmortizationType.EQUAL_INSTALLMENTS);
-            loanProductsRequest.setEnableInstallmentLevelDelinquency(true);
             PostLoanProductsResponse loanProductResponse = loanProductHelper.createLoanProduct(loanProductsRequest);
 
             // Apply and Approve Loan
@@ -215,7 +212,6 @@ public void testNoSnapshotEventGenerationWhenCOBDateIsNotMatchingWithInstallment
             // Create Loan Product
             PostLoanProductsRequest loanProductsRequest = create1InstallmentAmountInMultiplesOf4Period1MonthLongWithInterestAndAmortizationProduct(
                     InterestType.FLAT, AmortizationType.EQUAL_INSTALLMENTS);
-            loanProductsRequest.setEnableInstallmentLevelDelinquency(true);
             PostLoanProductsResponse loanProductResponse = loanProductHelper.createLoanProduct(loanProductsRequest);
 
             // Apply and Approve Loan
@@ -259,7 +255,6 @@ public void testNoSnapshotEventGenerationWhenCustomSnapshotEventIsDisabled() {
             // Create Loan Product
             PostLoanProductsRequest loanProductsRequest = create1InstallmentAmountInMultiplesOf4Period1MonthLongWithInterestAndAmortizationProduct(
                     InterestType.FLAT, AmortizationType.EQUAL_INSTALLMENTS);
-            loanProductsRequest.setEnableInstallmentLevelDelinquency(true);
             PostLoanProductsResponse loanProductResponse = loanProductHelper.createLoanProduct(loanProductsRequest);
 
             // Apply and Approve Loan
diff --git a/integration-tests/src/test/java/org/apache/fineract/integrationtests/InstallmentLevelDelinquencyAPIIntegrationTests.java b/integration-tests/src/test/java/org/apache/fineract/integrationtests/InstallmentLevelDelinquencyAPIIntegrationTests.java
index d6ed9adc7de..19a8e9c34e7 100644
--- a/integration-tests/src/test/java/org/apache/fineract/integrationtests/InstallmentLevelDelinquencyAPIIntegrationTests.java
+++ b/integration-tests/src/test/java/org/apache/fineract/integrationtests/InstallmentLevelDelinquencyAPIIntegrationTests.java
@@ -31,6 +31,7 @@
 import org.apache.fineract.client.models.GetLoansLoanIdResponse;
 import org.apache.fineract.client.models.PostLoanProductsRequest;
 import org.apache.fineract.client.models.PostLoanProductsResponse;
+import org.apache.fineract.client.models.PutLoanProductsProductIdRequest;
 import org.apache.fineract.client.util.CallFailedRuntimeException;
 import org.apache.fineract.integrationtests.common.ClientHelper;
 import org.apache.fineract.integrationtests.common.SchedulerJobHelper;
@@ -410,6 +411,55 @@ public void tesInstallmentLevelSettingForLoanWithLoanProductWithoutDelinquencyBu
 
     }
 
+    @Test
+    public void tesInstallmentLevelSettingForLoanProductWithoutDelinquencyBucketValidation() {
+
+        runAt("31 May 2023", () -> {
+            // Create Client
+            Long clientId = clientHelper.createClient(ClientHelper.defaultClientCreationRequest()).getClientId();
+
+            // Create Loan Product without delinquency bucket
+            PostLoanProductsRequest loanProductsRequest = create1InstallmentAmountInMultiplesOf4Period1MonthLongWithInterestAndAmortizationProduct(
+                    InterestType.FLAT, AmortizationType.EQUAL_INSTALLMENTS);
+            // set installment level delinquency as true
+            loanProductsRequest.setEnableInstallmentLevelDelinquency(true);
+
+            // Create loan product with installment level delinquency setting
+            CallFailedRuntimeException callFailedRuntimeException = Assertions.assertThrows(CallFailedRuntimeException.class,
+                    () -> loanProductHelper.createLoanProduct(loanProductsRequest));
+
+            Assertions.assertTrue(callFailedRuntimeException.getMessage()
+                    .contains("Installment level delinquency cannot be enabled if Delinquency bucket is not configured for loan product"));
+
+        });
+
+    }
+
+    @Test
+    public void tesUpdateInstallmentLevelSettingForLoanProductWithoutDelinquencyBucketValidation() {
+
+        runAt("31 May 2023", () -> {
+            // Create Client
+            Long clientId = clientHelper.createClient(ClientHelper.defaultClientCreationRequest()).getClientId();
+
+            // Create Loan Product without delinquency bucket
+            PostLoanProductsRequest loanProductsRequest = create1InstallmentAmountInMultiplesOf4Period1MonthLongWithInterestAndAmortizationProduct(
+                    InterestType.FLAT, AmortizationType.EQUAL_INSTALLMENTS);
+
+            PostLoanProductsResponse loanProductResponse = loanProductHelper.createLoanProduct(loanProductsRequest);
+
+            // Update loan product with installment level delinquency setting
+            CallFailedRuntimeException callFailedRuntimeException = Assertions.assertThrows(CallFailedRuntimeException.class,
+                    () -> loanProductHelper.updateLoanProductById(loanProductResponse.getResourceId(),
+                            new PutLoanProductsProductIdRequest().enableInstallmentLevelDelinquency(true).locale("en")));
+
+            Assertions.assertTrue(callFailedRuntimeException.getMessage()
+                    .contains("Installment level delinquency cannot be enabled if Delinquency bucket is not configured for loan product"));
+
+        });
+
+    }
+
     private void updateBusinessDateAndExecuteCOBJob(String date) {
         businessDateHelper.updateBusinessDate(
                 new BusinessDateRequest().type(BUSINESS_DATE.getName()).date(date).dateFormat(DATETIME_PATTERN).locale("en"));