Senior officials at the state-run financier are currently holding talks about implementing major changes to the investment banking side of the company as it seeks to restructure following the recession, the Daily Telegraph reports.
According to a source involved in the discussions, managers there are considering reducing the size of its Global Banking and Markets (GBM) arm by as much as 50 per cent.
This, it is hoped, would cut the division's balance sheet down to around Â£200 billion, therefore freeing up more funds for RBS - which has more than 40 million customers across the globe - to use elsewhere.
The insider told the news source that the government is "not prepared to keep things going in their present form" due to continuing difficulties in the markets.
By Asim Shah