diff --git a/crates/vault-registry/src/lib.rs b/crates/vault-registry/src/lib.rs
index 6d749510ca..c89e03ad51 100644
--- a/crates/vault-registry/src/lib.rs
+++ b/crates/vault-registry/src/lib.rs
@@ -1706,9 +1706,12 @@ impl<T: Config> Pallet<T> {
 
                 let request_redeem_tokens_for_max_premium = vault_to_burn_tokens.checked_div(&amount_wrapped).ok()?;
 
-                if Self::ensure_not_banned(&vault_id).is_ok() && !request_redeem_tokens_for_max_premium.is_zero()
-                // need `will_be_below_premium_threshold` check as `inclusion_fee` will be a non zero amount, hence `request_redeem_tokens_for_max_premium` will also be a non zero amount
-                && Self::will_be_below_premium_threshold(&vault_id).unwrap_or(false)
+                if Self::ensure_not_banned(&vault_id).is_ok()
+                    && !request_redeem_tokens_for_max_premium.is_zero()
+                    // Need to check `will_be_below_premium_threshold` to handle a corner case
+                    // where the vault is above PremiumThreshold, but `request_redeem_tokens_for_max_premium` is being calculated as a non-zero amount
+                    // since the `inclusion_fee` is a non-zero amount.
+                    && Self::will_be_below_premium_threshold(&vault_id).unwrap_or(false)
                 {
                     Some((vault_id, request_redeem_tokens_for_max_premium))
                 } else {