RBS is also looking to offload around £60 billion of assets from the markets division after the Bank of England last week said UK banks were collectively facing a £25 billion capital shortfall, according to The Sunday Times. It is thought RBS has the biggest capital hole of all the banks, at around £6 billion.
RBS is understood to be planning more drastic cuts at its investment banking business in an effort to meet the new target set by the Bank's Financial Policy Committee (FPC).
The part-nationalised group has already nearly halved its investment bank balance sheet, to £284 billion from more than £500 billion in 2008. It warned on releasing annual results last month that there would be further job losses at its markets division.
RBS declined to comment on the report.
Its shares fell heavily last week after the FPC said banks would be forced to take action to bolster their capital reserves to guard against future financial crises.
Banks have already made plans to fill around half of the capital hole and Bank governor Sir Mervyn King, who chairs the FPC, made it clear taxpayers would not need to stump up any more cash.
RBS plunged into the red by £5.2 billion in 2012 after a dire year for the group.
It has been hit by a series of reputational blows, including its £381 million settlement for attempting to rig interbank lending rates, mis-selling scandals and last year's IT meltdown that left millions of customers without access to their bank accounts.