In January 2016, the CBN reviewed the Revised Guide to Bank Charges (RGBC) which came into effect in April 2013.
Under the revised RGBC a phased elimination of Commission On Turnover (COT) was to bring COT to zero in January 2016 after it was reduced to 3 per mille in April 2013, 2 per mille in January 2014, 1 per mille in January 2015 and COT was to eventually come to 0 per mille in January 2016.

The revised RGBC gave rise to a negotiable current Account Maintenance Fee also known as Account Maintenance Charges (AMC) of 1 per mille in January 2016.

1 per mille refers to 0.1 per cent of the value of the AMC eligible transaction done on your bank account.

Here are 6 facts about AMC you should know

1. Not On Credit Transactions

AMC is calculated on the total amount of debit transaction or withdrawals on your account at a given interval. What this mean is that your account should not be charged AMC if there are no withdrawal either electronically via instant transfer, online or physical withdrawal with your cheques in the banking hall. If you continue to build your account balance with making withdrawals your account will not be charged AMC.

2. It is negotiable

AMC is negotiable, you can approach your bank to negotiate how much you want to pay for maintaining your account with the bank. While some bank will tie you to a covenant other may not. Bank A may tell you to maintain a certain monthly debit turnover to enjoy lower than 1 per mille AMC while other may not.

3. It is not charged on savings account

AMC is charged only on current account, it is not charged on savings account. Although the nomenclature of a saving account requires that you build up money in the account over a period of time and make withdrawal less frequently than on a current account. Some bank customers uses their saving account like current account. The bank is obliged to not charge your savings account with AMC. The only penalty for such customers is to loose interest accruals to their saving account for more than required frequency in withdrawals.

4. It is charged monthly

Most banks charge you once in a month for AMC. The total amount of debit transactions in your account within a month is charged at the end of the month. Although some banks will charge you immediately you perform transactions that are eligible for AMC. Monthly debit of total debit transaction is common among banks in Nigeria.

5. It is charged only on customer induced transaction

Customer induced transactions are transactions that are directly requested by the bank customer on his account. Such transactions as cash withdrawals, bank transfers, direct debit orders, airtime purchases, bills payment are all eligible for AMC while transactions like loan repayment are not eligible for AMC

6. Vat is paid on AMC

Value Added Tax of 10% of the amount charged to your account as AMC is also debited to your account and paid to federal government as VAT on AMC. This mean if you make cumulative amount of N10,000,000 in eligible AMC transactions in your account in a month. A total of N10,000 is debited to your account as AMC and an additional N1,000 is also debuted to your account and paid to federal government as VAT.

Source: www.nigerianbanker.com

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