Technology is top of the chops in RBS savings memo

The Royal Bank of Scotland's investment banking business is making cuts to its technology budgets and forcing contractors to take holidays as it identifies areas where savings can be made.

An internal RBS e-mail which was leaked to the BBC revealed 11 areas where there is an "opportunity to reduce spend".

The e-mail from CFO Chris Kyle said the investment unit needs to cut more costs. "As we head into the last quarter, there is a current need to further tighten and minimise the rate of spend on non-staff costs. The cost category governance forum has highlighted areas of opportunity to reduce spend," it read.

The bank said there will be a freeze on hardware and software spending for the rest of the year and approval for spending will have to be made by senior executives.

The bank also said all contractors and technical specialists will be forced to take a two-week holiday at the end of December next year.

In August, a blunder by recruitment company Hays revealed that some contractors at Royal Bank of Scotland (RBS) earn £2,000 per day. An unauthorised e-mail sent to 800 RBS employees revealed how much contractors were paid.