The part-nationalised bank is expected to report the charge when it posts third quarter figures on Friday.

It will follow today's details of another £1 billion to cover PPI claims at fellow state-backed player Lloyds Lloyds Banking Group, which left it nursing a £144 million loss in the three months to September 30.

The Lloyds charge took its PPI total to £5.3 billion, while Barclays recently announced an additional £700 million, giving it a total of £2 billion.

HSBC is forecasted to post a more modest PPI provision when it reports on Monday.

RBS's PPI charge is expected to overshadow figures showing underlying progress on its path to recovery following a massive state bailout at the height of the financial crisis, which has left it 80% owned by the taxpayer.

The lender is expected by Credit Suisse to report pre-tax losses of £1.8 billion, although this will be largely driven by an accounting effect on the value of its own credit.

As well as driving up profits at its core businesses and driving down bad debts, RBS recently exited a state-backed insurance scheme covering its poorer-quality assets.

The significant move was hailed by Chancellor George Osborne as another step towards returning the bank to the private sector.

RBS will save £1.4 million a day from leaving the Asset Protection Scheme (APS), having paid £2.5 billion since signing up February 2009.

However, the City is also likely to place some focus on its collapsed £1.65 billion branch sale with Santander.

Nationwide Building Society is reportedly considering a bid for the 316 branches, which EU regulators are forcing RBS to sell, although nothing has been confirmed.