{"data":{"id":"us-ky/krs-355.4a-405","jurisdiction":"us-ky","citation":"KRS 355.4A-405","heading":"Payment by beneficiary's bank to beneficiary.","body":"(1) If the beneficiary's bank credits an account of the beneficiary of a payment order,\npayment of the bank's obligation under KRS 355.4A -404(1) occurs when and to the\nextent:\n(a) The beneficiary is notified of the right to withdraw the credit;\n(b) The bank lawfully applies the credit to a debt of the beneficiary; or\n(c) Funds with respect to the order are otherwise made available to the beneficiary\nby the bank.\n(2) If the beneficiary's bank does not credit an account of the beneficiary of a payment\norder, the time when payment of the bank's obligation under KRS 355.4A -404(1)\noccurs is governed by principles of law that determine when an obligation is\nsatisfied.\n(3) Except as stated in subsections (4) and (5), if the beneficiary's bank pays the\nbeneficiary of a payment order under a condition to payment or agreement of the\nbeneficiary giving the bank the right to recover payment from the beneficiary if the\nbank does not receive payment of the order, the condition to payment or agreement\nis not enforceable.\n(4) A funds-transfer system rule may provide that payments made to beneficiaries of\nfunds transfers made through the system are provisional until receipt of payment by\nthe beneficiary's bank of the payment order it accepted. A beneficiary's bank that\nmakes a pay ment that is provisional under the rule is entitled to refund from the\nbeneficiary if:\n(a) The rule requires that both the beneficiary and the originator be given notice\nof the provisional nature of the payment before the funds transfer is initiated;\n(b) The beneficiary, the beneficiary's bank, and the originator's bank agreed to be\nbound by the rule; and\n(c) The beneficiary's bank did not receive payment of the payment order that it\naccepted. If the beneficiary is obliged to refund payment to the beneficia ry's\nbank, acceptance of the payment order by the beneficiary's bank is nullified\nand no payment by the originator of the funds transfer to the beneficiary\noccurs under KRS 355.4A-406.\n(5) This subsection applies to a funds transfer that includes a payment order transmitted\nover a funds-transfer system that:\n(a) Nets obligations multilaterally among participants; and\n(b) Has in effect a loss -sharing agreement among participants for the purpose of\nproviding funds necessary to complete settlement of the oblig ations of one (1)\nor more participants that do not meet their settlement obligations. If the\nbeneficiary's bank in the funds transfer accepts a payment order and the\nsystem fails to complete settlement pursuant to its rules with respect to any\npayment order in the funds transfer,\n1. The acceptance by the beneficiary's bank is nullified and no person has\nany right or obligation based on the acceptance;\n2. The beneficiary's bank is entitled to recover payment from the\nbeneficiary;\n3. No payment by the originator to the beneficiary occurs under KRS\n355.4A-406; and\n4. Subject to KRS 355.4A -402(5), each sender in the funds transfer is\nexcused from its obligation to pay its payment order under KRS 355.4A-\n402(3) because the funds transfer has not been completed.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33584","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:45Z","sha256":"65f649800f76eebb2a9bcd335f426e1c89f47f2257f0030067f7caf339e98c93","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.4a-404","next":"us-ky/krs-355.4a-406"},"notice":"GroundRules: Original legal text. Not legal advice."}