The UK government now owns almost 70% of RBS
Royal Bank of Scotland (RBS) has said it will cut up to 2,300 jobs as it restructures the business.
The jobs will be lost from its back office operations across the UK.
RBS said it hoped to keep compulsory redundancies "to a minimum", and said that there would be no cuts among its customer facing staff.
The bank needed a government bail-out last year. In exchange for £20bn of public funds, the government now has a stake of almost 70% in the lender.
The cuts represent about 2% of RBS's UK workforce of 106,000 employees.
RBS UK chief executive Alan Dickinson said he recognised "that any news of this nature is unwelcome at any time".
"It is essential, however, that we consistently review our business to ensure that we are able to operate as efficiently as possible, especially in the current economic circumstances," he added.
RBS shares closed down 4%.
RBS announced 3,000 job cuts in October, and recently said that it expected to make an annual loss of between £7bn and £8bn for 2008.
It is also set to write down the value of assets, largely related to its takeover of ABN Amro in 2007, by up to £20bn.
Former RBS chief executive Sir Fred Goodwin told MPs on Tuesday that he "could not be more sorry" for what had happened to the bank.
Speaking before the Treasury Committee, he added that the bonus culture across the whole banking sector needed to be reviewed.
Sir Fred and RBS's former chairman Sir Tom McKillop both resigned from the bank in October of last year.
Sir Tom admitted to MPs that his bank's much-criticised purchase of Dutch rival ABN Amro had been a "big mistake".
Chancellor Alistair Darling has also entered the recent row over banking bonuses, saying on Sunday that RBS should not reward its staff with excessive bonuses.
"I have spoken to the chief executive of RBS, and made it quite clear - and he agrees - that no-one associated with these huge losses should be allowed to walk away with large cash bonuses," said Mr Darling.