                                 CODE OF VIRGINIA

PAYMENT BY SENDER TO RECEIVING BANK (§ 8.4A-403)

a. Payment of the sender&#8217;s obligation under § 8.4A-402 to pay the
receiving bank occurs as follows:

   1. 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.

   2. 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   withdrawn or, if not withdrawn, at midnight of the day on which the credit is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.

   3. 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.

b. 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&#8217;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.

c. If two banks transmit payment orders to each other under an agreement that
settlement of the obligations of each bank to the other under &#xA7; 8.4A-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.

d. In a case not covered by subsection (a) of this section, the time when
payment of the sender&#8217;s obligation under subsection (b) or (c) of &#xA7;
8.4A-402 occurs is governed by applicable principles of law that determine when
an obligation is satisfied.

HISTORY: 1990, c. 9.