diff --git a/fineract-provider/src/main/java/org/apache/fineract/infrastructure/core/config/SpringConfig.java b/fineract-provider/src/main/java/org/apache/fineract/infrastructure/core/config/SpringConfig.java
index f4ae4a5e4..7f0db741b 100644
--- a/fineract-provider/src/main/java/org/apache/fineract/infrastructure/core/config/SpringConfig.java
+++ b/fineract-provider/src/main/java/org/apache/fineract/infrastructure/core/config/SpringConfig.java
@@ -19,34 +19,68 @@
 
 package org.apache.fineract.infrastructure.core.config;
 
+import java.util.concurrent.ThreadPoolExecutor;
+import org.springframework.beans.factory.annotation.Qualifier;
+import org.springframework.beans.factory.annotation.Value;
 import org.springframework.beans.factory.config.MethodInvokingFactoryBean;
+import org.springframework.boot.task.ThreadPoolTaskExecutorBuilder;
 import org.springframework.context.annotation.Bean;
 import org.springframework.context.annotation.Configuration;
 import org.springframework.context.annotation.DependsOn;
 import org.springframework.context.event.SimpleApplicationEventMulticaster;
-import org.springframework.core.task.SimpleAsyncTaskExecutor;
+import org.springframework.scheduling.concurrent.ThreadPoolTaskExecutor;
 import org.springframework.security.core.context.SecurityContextHolder;
 import org.springframework.security.core.context.SecurityContextHolderStrategy;
+import org.springframework.security.task.DelegatingSecurityContextAsyncTaskExecutor;
 
 @Configuration
 public class SpringConfig {
 
+    private static final int AWAIT_TERMINATION_SECONDS = 60;
+    private static final int DEFAULT_QUEUE_CAPACITY = 100;
+
+    @Bean(name = "fineractEventExecutor")
+    public ThreadPoolTaskExecutor fineractEventExecutor(ThreadPoolTaskExecutorBuilder builder,
+            @Value("${spring.task.execution.pool.core-size:-1}") int configuredCore,
+            @Value("${spring.task.execution.pool.max-size:-1}") int configuredMax,
+            @Value("${spring.task.execution.pool.queue-capacity:-1}") int configuredQueueCapacity) {
+
+        int cpus = Runtime.getRuntime().availableProcessors();
+        int smartCore = cpus * 2;
+        int smartMax = cpus * 5;
+
+        int coreSize = configuredCore > 0 ? configuredCore : smartCore;
+        int rawMaxSize = configuredMax > 0 ? configuredMax : smartMax;
+        int queueCapacity = configuredQueueCapacity >= 0 ? configuredQueueCapacity : DEFAULT_QUEUE_CAPACITY;
+
+        int finalMaxSize = Math.max(rawMaxSize, coreSize);
+
+        ThreadPoolTaskExecutor executor = builder.threadNamePrefix("FineractEvent-").corePoolSize(coreSize).maxPoolSize(finalMaxSize)
+                .queueCapacity(queueCapacity).build();
+
+        executor.setRejectedExecutionHandler(new ThreadPoolExecutor.CallerRunsPolicy());
+        executor.setWaitForTasksToCompleteOnShutdown(true);
+        executor.setAwaitTerminationSeconds(AWAIT_TERMINATION_SECONDS);
+
+        return executor;
+    }
+
     @Bean
-    public SimpleApplicationEventMulticaster applicationEventMulticaster() {
-        SimpleApplicationEventMulticaster saem = new SimpleApplicationEventMulticaster();
-        saem.setTaskExecutor(new SimpleAsyncTaskExecutor());
-        return saem;
+    @DependsOn("overrideSecurityContextHolderStrategy")
+    public SimpleApplicationEventMulticaster applicationEventMulticaster(
+            @Qualifier("fineractEventExecutor") ThreadPoolTaskExecutor taskExecutor) {
+        SimpleApplicationEventMulticaster multicaster = new SimpleApplicationEventMulticaster();
+        multicaster.setTaskExecutor(new DelegatingSecurityContextAsyncTaskExecutor(taskExecutor));
+        return multicaster;
     }
 
-    // The application events (for importing) rely on the inheritable thread local security context strategy
-    // This is NOT compatible with threadpools so if we use threadpools the below will need to be reworked
     @Bean
     public MethodInvokingFactoryBean overrideSecurityContextHolderStrategy() {
-        MethodInvokingFactoryBean mifb = new MethodInvokingFactoryBean();
-        mifb.setTargetClass(SecurityContextHolder.class);
-        mifb.setTargetMethod("setStrategyName");
-        mifb.setArguments("MODE_INHERITABLETHREADLOCAL");
-        return mifb;
+        MethodInvokingFactoryBean factoryBean = new MethodInvokingFactoryBean();
+        factoryBean.setTargetClass(SecurityContextHolder.class);
+        factoryBean.setTargetMethod("setStrategyName");
+        factoryBean.setArguments(SecurityContextHolder.MODE_INHERITABLETHREADLOCAL);
+        return factoryBean;
     }
 
     @Bean
diff --git a/fineract-provider/src/test/java/org/apache/fineract/infrastructure/core/config/SpringConfigTest.java b/fineract-provider/src/test/java/org/apache/fineract/infrastructure/core/config/SpringConfigTest.java
new file mode 100644
index 000000000..a7d02defb
--- /dev/null
+++ b/fineract-provider/src/test/java/org/apache/fineract/infrastructure/core/config/SpringConfigTest.java
@@ -0,0 +1,316 @@
+/**
+ * Licensed to the Apache Software Foundation (ASF) under one
+ * or more contributor license agreements. See the NOTICE file
+ * distributed with this work for additional information
+ * regarding copyright ownership. The ASF licenses this file
+ * to you under the Apache License, Version 2.0 (the
+ * "License"); you may not use this file except in compliance
+ * with the License. You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing,
+ * software distributed under the License is distributed on an
+ * "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+ * KIND, either express or implied. See the License for the
+ * specific language governing permissions and limitations
+ * under the License.
+ */
+package org.apache.fineract.infrastructure.core.config;
+
+import static org.assertj.core.api.Assertions.assertThat;
+
+import java.util.Set;
+import java.util.concurrent.ConcurrentHashMap;
+import java.util.concurrent.CountDownLatch;
+import java.util.concurrent.ThreadPoolExecutor;
+import java.util.concurrent.TimeUnit;
+import java.util.concurrent.atomic.AtomicInteger;
+import org.junit.jupiter.api.DisplayName;
+import org.junit.jupiter.api.Test;
+import org.junit.jupiter.params.ParameterizedTest;
+import org.junit.jupiter.params.provider.CsvSource;
+import org.springframework.boot.task.ThreadPoolTaskExecutorBuilder;
+import org.springframework.boot.test.context.runner.ApplicationContextRunner;
+import org.springframework.core.task.SimpleAsyncTaskExecutor;
+import org.springframework.scheduling.concurrent.ThreadPoolTaskExecutor;
+
+@DisplayName("SpringConfig Thread Pool Tests")
+class SpringConfigTest {
+
+    private final ApplicationContextRunner contextRunner = new ApplicationContextRunner().withUserConfiguration(SpringConfig.class)
+            .withBean(ThreadPoolTaskExecutorBuilder.class, ThreadPoolTaskExecutorBuilder::new)
+            .withInitializer(context -> context.getBeanFactory().registerSingleton("propertySourcesPlaceholderConfigurer",
+                    new org.springframework.context.support.PropertySourcesPlaceholderConfigurer()));
+
+    @Test
+    @DisplayName("SimpleAsyncTaskExecutor creates unbounded threads")
+    void simpleAsyncTaskExecutorCreatesUnboundedThreads() throws Exception {
+        String prefix = "SimpleAsync-";
+        SimpleAsyncTaskExecutor executor = new SimpleAsyncTaskExecutor(prefix);
+
+        CountDownLatch startGate = new CountDownLatch(1);
+        CountDownLatch readyLatch = new CountDownLatch(100);
+        CountDownLatch doneLatch = new CountDownLatch(100);
+
+        for (int i = 0; i < 100; i++) {
+            executor.execute(() -> {
+                readyLatch.countDown();
+                try {
+                    startGate.await();
+                } catch (InterruptedException e) {
+                    Thread.currentThread().interrupt();
+                } finally {
+                    doneLatch.countDown();
+                }
+            });
+        }
+
+        boolean allStarted = readyLatch.await(5, TimeUnit.SECONDS);
+        assertThat(allStarted).as("All 100 threads should start").isTrue();
+
+        long asyncThreadCount = Thread.getAllStackTraces().keySet().stream().filter(t -> t.getName().startsWith(prefix)).count();
+
+        startGate.countDown();
+        boolean allFinished = doneLatch.await(5, TimeUnit.SECONDS);
+
+        assertThat(asyncThreadCount).as("Unbounded executor creates ~100 threads for 100 tasks").isGreaterThan(90);
+        assertThat(allFinished).isTrue();
+    }
+
+    @Test
+    @DisplayName("ThreadPoolTaskExecutor bounds thread creation at maxPoolSize")
+    void threadPoolTaskExecutorBoundsThreadCreation() throws Exception {
+        ThreadPoolTaskExecutor executor = new ThreadPoolTaskExecutor();
+        executor.setCorePoolSize(4);
+        executor.setMaxPoolSize(10);
+        executor.setQueueCapacity(500);
+        executor.setThreadNamePrefix("Bounded-");
+        executor.initialize();
+
+        try {
+            CountDownLatch latch = new CountDownLatch(500);
+            Set<String> threadNames = ConcurrentHashMap.newKeySet();
+
+            for (int i = 0; i < 500; i++) {
+                executor.execute(() -> {
+                    threadNames.add(Thread.currentThread().getName());
+                    try {
+                        Thread.sleep(5);
+                    } catch (InterruptedException e) {
+                        Thread.currentThread().interrupt();
+                    }
+                    latch.countDown();
+                });
+            }
+            assertThat(latch.await(30, TimeUnit.SECONDS)).isTrue();
+
+            assertThat(threadNames.size()).as("Thread count capped at maxPoolSize").isLessThanOrEqualTo(10);
+            assertThat(threadNames.size()).as("Parallelism proof: multiple threads used").isGreaterThan(1);
+        } finally {
+            executor.shutdown();
+        }
+    }
+
+    @Test
+    @DisplayName("Smart defaults: CPU-aware pool sizing")
+    void smartDefaultsUseCpuAwarePoolSizing() {
+        ThreadPoolTaskExecutorBuilder builder = new ThreadPoolTaskExecutorBuilder();
+        SpringConfig config = new SpringConfig();
+
+        ThreadPoolTaskExecutor executor = config.fineractEventExecutor(builder, -1, -1, -1);
+
+        int expectedCore = Runtime.getRuntime().availableProcessors() * 2;
+        int expectedMax = Runtime.getRuntime().availableProcessors() * 5;
+
+        assertThat(executor.getCorePoolSize()).isEqualTo(expectedCore);
+        assertThat(executor.getMaxPoolSize()).isEqualTo(expectedMax);
+        assertThat(executor.getQueueCapacity()).isEqualTo(100);
+    }
+
+    @Test
+    @DisplayName("User properties override smart defaults")
+    void userPropertiesOverrideSmartDefaults() {
+        ThreadPoolTaskExecutorBuilder builder = new ThreadPoolTaskExecutorBuilder();
+        SpringConfig config = new SpringConfig();
+
+        ThreadPoolTaskExecutor executor = config.fineractEventExecutor(builder, 16, 40, 200);
+
+        assertThat(executor.getCorePoolSize()).isEqualTo(16);
+        assertThat(executor.getMaxPoolSize()).isEqualTo(40);
+        assertThat(executor.getQueueCapacity()).isEqualTo(200);
+    }
+
+    @Test
+    @DisplayName("Absolute safety: maxSize adjusted when user sets high core but low max")
+    void absoluteSafetyAdjustsMaxWhenUserSetsHighCoreButLowMax() {
+        ThreadPoolTaskExecutorBuilder builder = new ThreadPoolTaskExecutorBuilder();
+        SpringConfig config = new SpringConfig();
+
+        ThreadPoolTaskExecutor executor = config.fineractEventExecutor(builder, 50, 40, -1);
+
+        assertThat(executor.getCorePoolSize()).isEqualTo(50);
+        assertThat(executor.getMaxPoolSize()).as("Max adjusted to match core").isEqualTo(50);
+    }
+
+    @Test
+    @DisplayName("Absolute safety: maxSize adjusted when smart default too small for user core")
+    void absoluteSafetyAdjustsMaxWhenSmartDefaultTooSmallForUserCore() {
+        ThreadPoolTaskExecutorBuilder builder = new ThreadPoolTaskExecutorBuilder();
+        SpringConfig config = new SpringConfig();
+
+        int cpus = Runtime.getRuntime().availableProcessors();
+        int smartMax = cpus * 5;
+
+        ThreadPoolTaskExecutor executor = config.fineractEventExecutor(builder, smartMax + 10, -1, -1);
+
+        assertThat(executor.getCorePoolSize()).isEqualTo(smartMax + 10);
+        assertThat(executor.getMaxPoolSize()).as("Max adjusted above smart default to match core").isEqualTo(smartMax + 10);
+    }
+
+    @Test
+    @DisplayName("CallerRunsPolicy provides backpressure when pool is saturated")
+    void threadPoolWithCallerRunsPolicyProvidesBackpressure() throws Exception {
+        String mainThread = Thread.currentThread().getName();
+        ThreadPoolTaskExecutor executor = new ThreadPoolTaskExecutor();
+        executor.setCorePoolSize(2);
+        executor.setMaxPoolSize(4);
+        executor.setQueueCapacity(10);
+        executor.setRejectedExecutionHandler(new ThreadPoolExecutor.CallerRunsPolicy());
+        executor.initialize();
+
+        try {
+            AtomicInteger callerExecutions = new AtomicInteger(0);
+            CountDownLatch latch = new CountDownLatch(50);
+
+            for (int i = 0; i < 50; i++) {
+                executor.execute(() -> {
+                    if (Thread.currentThread().getName().equals(mainThread)) {
+                        callerExecutions.incrementAndGet();
+                    }
+                    try {
+                        Thread.sleep(50);
+                    } catch (InterruptedException e) {
+                        Thread.currentThread().interrupt();
+                    }
+                    latch.countDown();
+                });
+            }
+            assertThat(latch.await(30, TimeUnit.SECONDS)).isTrue();
+
+            assertThat(callerExecutions.get()).as("Caller thread executed rejected tasks").isGreaterThan(0);
+        } finally {
+            executor.shutdown();
+        }
+    }
+
+    @Test
+    @DisplayName("Configured executor has CallerRunsPolicy rejection handler")
+    void configuredExecutorHasCallerRunsPolicy() {
+        ThreadPoolTaskExecutorBuilder builder = new ThreadPoolTaskExecutorBuilder();
+        SpringConfig config = new SpringConfig();
+
+        ThreadPoolTaskExecutor executor = config.fineractEventExecutor(builder, -1, -1, -1);
+        executor.initialize();
+
+        try {
+            assertThat(executor.getThreadPoolExecutor().getRejectedExecutionHandler())
+                    .isInstanceOf(ThreadPoolExecutor.CallerRunsPolicy.class);
+        } finally {
+            executor.shutdown();
+        }
+    }
+
+    @Test
+    @DisplayName("Bounded pool prevents thread explosion under 500 concurrent tasks")
+    void boundedPoolPreventsThreadExplosionUnderHighLoad() throws Exception {
+        ThreadPoolTaskExecutor executor = new ThreadPoolTaskExecutor();
+        executor.setCorePoolSize(4);
+        executor.setMaxPoolSize(10);
+        executor.setQueueCapacity(100);
+        executor.setThreadNamePrefix("FineractEvent-");
+        executor.setRejectedExecutionHandler(new ThreadPoolExecutor.CallerRunsPolicy());
+        executor.initialize();
+
+        try {
+            int taskCount = 500;
+            CountDownLatch latch = new CountDownLatch(taskCount);
+            Set<String> threadNames = ConcurrentHashMap.newKeySet();
+
+            for (int i = 0; i < taskCount; i++) {
+                executor.execute(() -> {
+                    threadNames.add(Thread.currentThread().getName());
+                    try {
+                        Thread.sleep(50);
+                    } catch (InterruptedException e) {
+                        Thread.currentThread().interrupt();
+                    }
+                    latch.countDown();
+                });
+            }
+
+            assertThat(latch.await(60, TimeUnit.SECONDS)).isTrue();
+
+            long poolThreadCount = threadNames.stream().filter(name -> name.startsWith("FineractEvent-")).count();
+
+            assertThat(poolThreadCount).as("Pool creates max 10 threads, not 500").isLessThanOrEqualTo(10);
+
+            assertThat(poolThreadCount).as("Pool threads were created").isGreaterThan(0);
+
+            boolean mainThreadHelped = threadNames.stream().anyMatch(name -> !name.startsWith("FineractEvent-"));
+
+            assertThat(mainThreadHelped).as("Main thread executed rejected tasks (CallerRunsPolicy)").isTrue();
+        } finally {
+            executor.shutdown();
+        }
+    }
+
+    @Test
+    @DisplayName("CallerRunsPolicy provides natural backpressure when pool saturated")
+    void callerRunsPolicyProvidesBackpressureUnderLoad() throws Exception {
+        ThreadPoolTaskExecutor executor = new ThreadPoolTaskExecutor();
+        executor.setCorePoolSize(2);
+        executor.setMaxPoolSize(4);
+        executor.setQueueCapacity(10);
+        executor.setRejectedExecutionHandler(new ThreadPoolExecutor.CallerRunsPolicy());
+        executor.initialize();
+
+        try {
+            String mainThreadName = Thread.currentThread().getName();
+            AtomicInteger mainThreadExecutions = new AtomicInteger(0);
+            CountDownLatch latch = new CountDownLatch(50);
+
+            for (int i = 0; i < 50; i++) {
+                executor.execute(() -> {
+                    if (Thread.currentThread().getName().equals(mainThreadName)) {
+                        mainThreadExecutions.incrementAndGet();
+                    }
+                    try {
+                        Thread.sleep(100);
+                    } catch (InterruptedException e) {
+                        Thread.currentThread().interrupt();
+                    }
+                    latch.countDown();
+                });
+            }
+
+            assertThat(latch.await(30, TimeUnit.SECONDS)).as("All tasks completed despite saturation").isTrue();
+
+            assertThat(mainThreadExecutions.get()).as("Main thread executed rejected tasks (natural backpressure)").isGreaterThan(0);
+        } finally {
+            executor.shutdown();
+        }
+    }
+
+    @ParameterizedTest(name = "Mode: {0}")
+    @DisplayName("Event executor is active in all Fineract modes")
+    @CsvSource({ "fineract.mode.read-enabled=true", "fineract.mode.write-enabled=true", "fineract.mode.batch-worker-enabled=true",
+            "fineract.mode.batch-manager-enabled=true" })
+    void verifyExecutorIsActiveInMode(String modeProperty) {
+        contextRunner.withPropertyValues(modeProperty).run(context -> {
+            assertThat(context).hasBean("fineractEventExecutor");
+            ThreadPoolTaskExecutor executor = context.getBean("fineractEventExecutor", ThreadPoolTaskExecutor.class);
+            assertThat(executor.getThreadNamePrefix()).isEqualTo("FineractEvent-");
+        });
+    }
+}