N.Y. UCC Law § 4-301

Section 4--301. Deferred Posting; Recovery of Payment by Return of\n Items; Time of Dishonor.\n (1) Where an authorized settlement for a demand item (other than a\ndocumentary draft) received by a payor bank otherwise than for immediate\npayment over the counter has been made before midnight of the banking\nday of receipt the payor bank may revoke the settlement and recover any\npayment if before it has made final payment (subsection (1) of Section\n4--213) and before its midnight deadline it\n (a) returns the item; or\n (b) sends written notice of dishonor or nonpayment if the item is\n held for protest or is otherwise unavailable for return.\n (2) If a demand item is received by a payor bank for credit on its\nbooks it may return such item or send notice of dishonor and may revoke\nany credit given or recover the amount thereof withdrawn by its\ncustomer, if it acts within the time limit and in the manner specified\nin the preceding subsection.\n (3) Unless previous notice of dishonor has been sent an item is\ndishonored at the time when for purposes of dishonor it is returned or\nnotice sent in accordance with this section.\n (4) An item is returned:\n (a) as to an item received through a clearing house, when it is\n delivered to the presenting or last collecting bank or to the\n clearing house or is sent or delivered in accordance with its\n rules; or\n (b) in all other cases, when it is sent or delivered to the\n bank's customer or transferor or pursuant to his\n instructions.\n