diff --git a/cmd/iam.go b/cmd/iam.go
index e9571de52..ed437e345 100644
--- a/cmd/iam.go
+++ b/cmd/iam.go
@@ -1849,7 +1849,7 @@ func (sys *IAMSys) IsAllowedServiceAccount(args policy.Args, parentUser string)
 	}
 
 	// 3. If an inline session-policy is present, evaluate it.
-	hasSessionPolicy, isAllowedSP := isAllowedBySessionPolicy(args)
+	hasSessionPolicy, isAllowedSP := isAllowedBySessionPolicyForServiceAccount(args)
 	if hasSessionPolicy {
 		return isAllowedSP && (isOwnerDerived || combinedPolicy.IsAllowed(parentArgs))
 	}
@@ -1945,6 +1945,67 @@ func (sys *IAMSys) IsAllowedSTS(args policy.Args, parentUser string) bool {
 	return isOwnerDerived || combinedPolicy.IsAllowed(args)
 }
 
+func isAllowedBySessionPolicyForServiceAccount(args policy.Args) (hasSessionPolicy bool, isAllowed bool) {
+	hasSessionPolicy = false
+	isAllowed = false
+
+	// Now check if we have a sessionPolicy.
+	spolicy, ok := args.Claims[sessionPolicyNameExtracted]
+	if !ok {
+		return
+	}
+
+	hasSessionPolicy = true
+
+	spolicyStr, ok := spolicy.(string)
+	if !ok {
+		// Sub policy if set, should be a string reject
+		// malformed/malicious requests.
+		return
+	}
+
+	// Check if policy is parseable.
+	subPolicy, err := policy.ParseConfig(bytes.NewReader([]byte(spolicyStr)))
+	if err != nil {
+		// Log any error in input session policy config.
+		logger.LogIf(GlobalContext, err)
+		return
+	}
+
+	// SPECIAL CASE: For service accounts, any valid JSON is allowed as a
+	// policy, regardless of whether the number of statements is 0, this
+	// includes `null`, `{}` and `{"Statement": null}`. In fact, MinIO Console
+	// sends `null` when no policy is set and the intended behavior is that the
+	// service account should inherit parent policy.
+	//
+	// However, for a policy like `{"Statement":[]}`, the intention is to not
+	// provide any permissions via the session policy - i.e. the service account
+	// can do nothing (such a JSON could be generated by an external application
+	// as the policy for the service account). Inheriting the parent policy in
+	// such a case, is a security issue. Ideally, we should not allow such
+	// behavior, but for compatibility with the Console, we currently allow it.
+	//
+	// TODO:
+	//
+	// 1. fix console behavior and allow this inheritance for service accounts
+	// created before a certain (TBD) future date.
+	//
+	// 2. do not allow empty statement policies for service accounts.
+	if subPolicy.Version == "" && subPolicy.Statements == nil && subPolicy.ID == "" {
+		hasSessionPolicy = false
+		return
+	}
+
+	// As the session policy exists, even if the parent is the root account, it
+	// must be restricted by it. So, we set `.IsOwner` to false here
+	// unconditionally.
+	sessionPolicyArgs := args
+	sessionPolicyArgs.IsOwner = false
+
+	// Sub policy is set and valid.
+	return hasSessionPolicy, subPolicy.IsAllowed(sessionPolicyArgs)
+}
+
 func isAllowedBySessionPolicy(args policy.Args) (hasSessionPolicy bool, isAllowed bool) {
 	hasSessionPolicy = false
 	isAllowed = false