Maintenance projects, back office and application development could be outsourced to Indian firms including Infosys and TCS, according to the Economic Times.
RBS is aiming to cut around $4 billion from its operational costs by 2011, something it plans to do in part by outsourcing non-core IT activities.
Stephen Hester, RBS chief executive, told Bank of America investors last week that RBS had actually underspent on technology in their budgets during past few years.
"We have spent more of it of running the bank - dealing with lots of different systems inherited from past acquisitions - than changing the bank," he said.
As part of the bank's frugal new approach, it is now only accepting credit card applications from its existing customers.
By Gary Cooper