§ 6A-4.1-506 - Rate of interest. - Rhode Island Statutes

SECTION 6A-4.1-506

   § 6A-4.1-506  Rate of interest. – (a) If, under this chapter, a receiving bank is obliged to pay interest withrespect to a payment order issued to the bank, the amount payable may bedetermined (i) by agreement of the sender and receiving bank, or (ii) by afunds transfer system rule if the payment order is transmitted through a fundstransfer system.

   (b) If the amount of interest is not determined by anagreement or rule as stated in subsection (a), the amount is calculated bymultiplying the applicable federal funds rate by the amount on which interestis payable, and then multiplying the product by the number of days for whichinterest is payable. The applicable federal funds rate is the average of thefederal funds rates published by the federal reserve bank of New York for eachof the days for which interest is payable divided by 360. The federal fundsrate for any day on which a published rate is not available is the same as thepublished 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 paymentto the sender of the order because the funds transfer was not completed, butthe failure to complete was not due to any fault by the bank, the interestpayable is reduced by a percentage equal to the reserve requirement on depositsof the receiving bank.