diff --git a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/AbstractLoanRepaymentScheduleTransactionProcessor.java b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/AbstractLoanRepaymentScheduleTransactionProcessor.java
index 5d8aaba0881..a9e79237031 100755
--- a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/AbstractLoanRepaymentScheduleTransactionProcessor.java
+++ b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/transactionprocessor/AbstractLoanRepaymentScheduleTransactionProcessor.java
@@ -245,7 +245,7 @@ private Money handleTransactionAndCharges(final LoanTransaction loanTransaction,
             installmentNumber = installments.get(0).getInstallmentNumber();
         }
 
-        if (loanTransaction.isNotWaiver()) {
+        if (loanTransaction.isNotWaiver() && !loanTransaction.isAccrual()) {
             Money feeCharges = loanTransaction.getFeeChargesPortion(currency);
             Money penaltyCharges = loanTransaction.getPenaltyChargesPortion(currency);
             if (chargeAmountToProcess != null && feeCharges.isGreaterThan(chargeAmountToProcess)) {