Section 4-A-403. Payment by Sender to Receiving Bank.

(1) Payment of the sender's obligation under Section 4-A-402 to pay
the receiving bank occurs as follows:

(a) If the sender is a bank, payment occurs when the receiving

bank receives final settlement of the obligation through a

Federal Reserve Bank or through a funds-transfer system.

(b) If the sender is a bank and the sender (i) credited an

account of the receiving bank with the sender, or (ii) caused

an account of the receiving bank in another bank to be

credited, payment occurs when the credit is withdrawn or, if

not withdrawn, at midnight of the day on which the credit is

withdrawable and the receiving bank learns of that fact.

(c) If the receiving bank debits an account of the sender with

the receiving bank, payment occurs when the debit is made to

the extent the debit is covered by a withdrawable credit

balance in the account.

(2) If the sender and receiving bank are members of a funds-transfer
system that nets obligations multilaterally among participants, the
receiving bank receives final settlement when settlement is complete in
accordance with the rules of the system. The obligation of the sender to
pay the amount of a payment order transmitted through the funds-transfer
system may be satisfied, to the extent permitted by the rules of the
system, by setting off and applying against the sender's obligation the
right of the sender to receive payment from the receiving bank of the
amount of any other payment order transmitted to the sender by the
receiving bank through the funds-transfer system. The aggregate balance
of obligations owed by each sender to each receiving bank in the
funds-transfer system may be satisfied, to the extent permitted by the
rules of the system, by setting off and applying against that balance
the aggregate balance of obligations owed to the sender by other members
of the system. The aggregate balance is determined after the right of
setoff stated in the second sentence of this subsection has been
exercised.

(3) If two banks transmit payment orders to each other under an
agreement that settlement of the obligations of each bank to the other
under Section 4-A-402 will be made at the end of the day or other
period, the total amount owed with respect to all orders transmitted by
one bank shall be set off against the total amount owed with respect to
all orders transmitted by the other bank. To the extent of the setoff,
each bank has made payment to the other.

(4) In a case not covered by subsection (1), the time when payment of
the sender's obligation under subsection (2) or subsection (3) of
Section 4-A-402 occurs is governed by applicable principles of law that
determine when an obligation is satisfied.