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 0a75c5267..a4fb6f277 100644
--- 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
@@ -185,7 +185,7 @@ public abstract class AbstractLoanRepaymentScheduleTransactionProcessor implemen
                         loanTransaction.updateLoanTransactionToRepaymentScheduleMappings(
                                 newLoanTransaction.getLoanTransactionToRepaymentScheduleMappings());
                     } else {
-                        loanTransaction.reverse(loanTransaction.getExternalId());
+                        loanTransaction.reverse();
                         loanTransaction.updateExternalId(null);
                         newLoanTransaction.copyLoanTransactionRelations(loanTransaction.getLoanTransactionRelations());
                         // Adding Replayed relation from newly created transaction to reversed transaction
diff --git a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java
index 7cb647553..06b9a8fed 100644
--- a/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java
+++ b/fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanWritePlatformServiceJpaRepositoryImpl.java
@@ -1068,9 +1068,10 @@ public class LoanWritePlatformServiceJpaRepositoryImpl implements LoanWritePlatf
         final LocalDate transactionDate = command.localDateValueOfParameterNamed("transactionDate");
         final BigDecimal transactionAmount = command.bigDecimalValueOfParameterNamed("transactionAmount");
         final ExternalId txnExternalId = externalIdFactory.createFromCommand(command, LoanApiConstants.externalIdParameterName);
-        // TODO: can it be refactored to use the 'externalId' for reversal?
-        final ExternalId reversalTxnExternalId = externalIdFactory.createFromCommand(command,
-                LoanApiConstants.REVERSAL_EXTERNAL_ID_PARAMNAME);
+
+        // We dont need auto generation for reversal external id... if it is not provided, it remains null (empty)
+        final String reversalExternalId = command.stringValueOfParameterNamedAllowingNull(LoanApiConstants.REVERSAL_EXTERNAL_ID_PARAMNAME);
+        final ExternalId reversalTxnExternalId = ExternalIdFactory.produce(reversalExternalId);
 
         final Map<String, Object> changes = new LinkedHashMap<>();
         changes.put("transactionDate", command.stringValueOfParameterNamed("transactionDate"));