§ 26-1-4-215 — Final payment of item by payor bank; when provisional debits and credits become final; when certain credits become available for withdrawal

Indiana § 26-1-4-215

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 4: Bank Deposits and Collections

Text

(a) An item is finally paid by a payor bank
when the bank has first done any of the following:
(1) Paid the item in cash.
(2) Settled for the item without having a right to revoke the
settlement under statute, clearing-house rule, or agreement.
(3) Made a provisional settlement for the item and failed to
revoke the settlement in the time and manner permitted by statute,
clearing-house rule, or agreement.
(b) If provisional settlement for an item does not become final, the
item is not finally paid.
(c) If provisional settlement for an item between the presenting and
payor banks is made through a clearing house or by debits or credits in
an account between them, then to the extent that provisional debits or
credits for the item are entered in accounts between the presenting and
payor banks or between the presenting and successive prior collecting
banks seriatim, they become final upon final payment of the items by
the payor bank.
(d) If a collecting bank receives a settlement for an item which is or
becomes final, the bank is accountable to its customer for the amount
of the item and any provisional credit given for the item in an account
with its customer becomes final.
(e) Subject to (i) applicable law stating a time for availability of
funds and (ii) any right of the bank to apply the credit to an obligation
of the customer, credit given by a bank for an item in a customer's
account becomes available for withdrawal as of right:
(1) if the bank has received a provisional settlement for the item,
when the settlement becomes final and the bank has had a
reasonable time to receive return of the item and the item has not
been received within that time; or
(2) if the bank is both the depositary bank and the payor bank, and
the item is finally paid, at the opening of the bank's second
banking day following receipt of the item.
(f) Subject to applicable law stating a time for availability of funds
and any right of a bank to apply a deposit to an obligation of the
depositor, a deposit of money becomes available for withdrawal as of
right at the opening of the bank's next banking day after receipt of the
deposit.

Legislative History

As added by P.L.222-1993, SEC.31.