diff --git a/app/client/src/components/editorComponents/form/fields/DatasourcesField.tsx b/app/client/src/components/editorComponents/form/fields/DatasourcesField.tsx
index a641f58f0c..2ea21e44c7 100644
--- a/app/client/src/components/editorComponents/form/fields/DatasourcesField.tsx
+++ b/app/client/src/components/editorComponents/form/fields/DatasourcesField.tsx
@@ -106,7 +106,7 @@ const DatasourcesField = (
   }
 
   const DropdownIndicator = (props: any) => {
-    if (props.hasValue) return null;
+    if (props.hasValue || !props.selectProps.inputValue) return null;
 
     const MenuContainer = (
       <StyledMenu>
@@ -198,7 +198,7 @@ const DatasourcesField = (
             const baseUrl = url.origin;
 
             datasourcePayload = {
-              name: baseUrl,
+              name: baseUrl || "DEFAULT_REST_DATASOURCE",
               datasourceConfiguration: {
                 url: baseUrl,
               },
@@ -206,7 +206,7 @@ const DatasourcesField = (
             pathPayload = path + params;
           } catch (e) {
             datasourcePayload = {
-              name: value,
+              name: value || "DEFAULT_REST_DATASOURCE",
               datasourceConfiguration: {
                 url: value,
               },
diff --git a/app/client/src/sagas/DatasourcesSagas.ts b/app/client/src/sagas/DatasourcesSagas.ts
index 966da486df..9fc2a23183 100644
--- a/app/client/src/sagas/DatasourcesSagas.ts
+++ b/app/client/src/sagas/DatasourcesSagas.ts
@@ -368,7 +368,8 @@ function* storeAsDatasourceSaga() {
   const { values } = yield select(getFormData, API_EDITOR_FORM_NAME);
   const applicationId = yield select(getCurrentApplicationId);
   const pageId = yield select(getCurrentPageId);
-  const datasource = _.get(values, "datasource");
+  let datasource = _.get(values, "datasource");
+  datasource = _.omit(datasource, ["name"]);
 
   history.push(DATA_SOURCES_EDITOR_URL(applicationId, pageId));