The taxpayer-owned lender suggested the idea could see the core functions of an institution separated from investment banking divisions that centre on complex financial derivatives and proprietary trading, Sky News reports.
Included in the ring-fenced section, however, would be operations within investment banks - such as foreign exchange trading.
The website explained the approach would mean those activities viewed as important to business and retail customers would be kept apart from practices deemed more speculative.
RBS's suggestion comes as part of its submission to the Independent Commission on Banking (ICB), which put forward a form of ring-fencing in its April-released interim report.
The ICB came into being on June 16th 2010 under the leadership of Sir John Vickers and is tasked with bringing structural and non-structural reforms to the UK banking sector following the recent economic downturn.
By Gary Cooper