§ 6A-4.1-403 - Payment by sender to receiving bank.
SECTION 6A-4.1-403
§ 6A-4.1-403 Payment by sender toreceiving bank. – (a) Payment of the sender's obligation under § 6A-4.1-402 to pay thereceiving bank occurs as follows:
(1) If the sender is a bank, payment occurs when thereceiving bank receives final settlement of the obligation through a federalreserve bank or through a funds transfer system.
(2) If the sender is a bank and the sender (i) credited anaccount of the receiving bank with the sender, or (ii) caused an account of thereceiving bank in another bank to be credited, payment occurs when the creditis withdrawn or, if not withdrawn, at midnight of the day on which the creditis withdrawable and the receiving bank learns of that fact.
(3) If the receiving bank debits an account of the senderwith the receiving bank, payment occurs when the debit is made to the extentthe debit is covered by a withdrawable credit balance in the account.
(b) If the sender and receiving bank are members of a fundstransfer system that nets obligations multilaterally among participants, thereceiving bank receives final settlement when settlement is complete inaccordance with the rules of the system. The obligation of the sender to paythe amount of a payment order transmitted through the funds transfer system maybe satisfied, to the extent permitted by the rules of the system, by settingoff and applying against the sender's obligation the right of the sender toreceive payment from the receiving bank of the amount of any other paymentorder transmitted to the sender by the receiving bank through the fundstransfer system. The aggregate balance of obligations owed by each sender toeach receiving bank in the funds transfer system may be satisfied, to theextent permitted by the rules of the system, by setting off and applyingagainst that balance the aggregate balance of obligations owed to the sender byother members of the system. The aggregate balance is determined after theright of setoff stated in the second sentence of this subsection has beenexercised.
(c) If two (2) banks transmit payment orders to each otherunder an agreement that settlement of the obligations of each bank to the otherunder § 6A-4.1-402 will be made at the end of the day or other period, thetotal amount owed with respect to all orders transmitted by one bank shall beset off against the total amount owed with respect to all orders transmitted bythe other bank. To the extent of the setoff, each bank has made payment to theother.
(d) In a case not covered by subsection (a), the time whenpayment of the sender's obligation under § 6A-4.1-402(b) or 6A-4.1-402(c)occurs is governed by applicable principles of law that determine when anobligation is satisfied.