§ 26-1-4.1-506 — Rate of interest

Indiana § 26-1-4.1-506

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 4.1: Fund Transfers

Text

(a) If, under IC 26-1-4.1, a receiving bank
is obliged to pay interest with respect to a payment order issued to the
bank, the amount payable may be determined (i) by agreement of the
sender and receiving bank, or (ii) by a funds-transfer system rule if the
payment order is transmitted through a funds-transfer system.
(b) If the amount of interest is not determined by an agreement or
rule as stated in subsection (a), the amount is calculated by multiplying
the applicable Federal Funds rate by the amount on which interest is
payable, and then multiplying the product by the number of days for
which interest is payable. The applicable Federal Funds rate is the
average of the Federal Funds rates published by the Federal Reserve
Bank of New York for each of the days for which interest is payable
divided by three hundred sixty (360). The Federal Funds rate for any
day on which a published rate is not available is the same as the
published rate for the next preceding day for which there is a published
rate. If a receiving bank that accepted a payment order is required to
refund payment to the sender of the order because the funds transfer
was not completed, but the failure to complete was not due to any fault
by the bank, the interest payable is reduced by a percentage equal to the
reserve requirement on deposits of the receiving bank.

Legislative History

As added by P.L.189-1991, SEC.4.