The instruments act as debt when issued, but can convert into equity if the bank gets into trouble. The bail-in bonds are popular with markets and backed by regulators, but need shareholders’ permission as the conversion to equity dilutes the existing owners.
It came as a panel of MPs called for the government to consider moving RBS’ worst assets into a bad bank to accelerate its turnaround and boost overall lending.
A major report from the treasury select committee (TSC) argued the government should consider the costs and benefits in the coming months to decide how best to manage the state-backed lender.
However RBS itself rejects the demands, arguing it should be fully turned around in the coming years.
The TSC report also warned the new Help to Buy Scheme may prove an expensive new policy.
The chancellor plans to offer guarantees to buyers with small deposits, covering any losses by charging a fee to lenders for the extra support.
But the TSC fears the fees will not cover the losses.