diff --git a/fineract-savings/src/main/java/org/apache/fineract/portfolio/savings/domain/SavingsAccount.java b/fineract-savings/src/main/java/org/apache/fineract/portfolio/savings/domain/SavingsAccount.java
index 5d2cb13ca..aa728ff7f 100644
--- a/fineract-savings/src/main/java/org/apache/fineract/portfolio/savings/domain/SavingsAccount.java
+++ b/fineract-savings/src/main/java/org/apache/fineract/portfolio/savings/domain/SavingsAccount.java
@@ -1656,10 +1656,19 @@ public class SavingsAccount extends AbstractAuditableWithUTCDateTimeCustom<Long>
             final DataValidatorBuilder baseDataValidator) {
 
         final SavingsAccountStatusType currentStatus = SavingsAccountStatusType.fromInt(this.status);
-        if (!SavingsAccountStatusType.SUBMITTED_AND_PENDING_APPROVAL.hasStateOf(currentStatus)) {
+        final boolean isAllowedState = SavingsAccountStatusType.SUBMITTED_AND_PENDING_APPROVAL.hasStateOf(currentStatus)
+                || SavingsAccountStatusType.REJECTED.hasStateOf(currentStatus);
+        if (!isAllowedState) {
             baseDataValidator.reset().failWithCodeNoParameterAddedToErrorCode("not.in.submittedandpendingapproval.state");
             return;
         }
+        // If modifying a rejected application, reset it back to pending approval
+        if (SavingsAccountStatusType.REJECTED.hasStateOf(currentStatus)) {
+            this.status = SavingsAccountStatusType.SUBMITTED_AND_PENDING_APPROVAL.getValue();
+            this.rejectedOnDate = null;
+            this.rejectedBy = null;
+            actualChanges.put("status", SavingsAccountStatusType.SUBMITTED_AND_PENDING_APPROVAL.getValue());
+        }
 
         final String localeAsInput = command.locale();
         final String dateFormat = command.dateFormat();