The need for information security is increasing day by day as many people are depending on internet for their daily needs. In this wok an algorithm for RGB based image steganography is presented. The algorithm uses LSB principle for embedding a secret color image in RGB 24-bits color image carrier either in one or two channels depending on the third one (index channel). The algorithm offered good capacity ratio with no visual distortion on the original image after hiding the secret image. Randomization is used for choosing the index channel for more security. Encryption is done using Arnold cat map for secret image before embedding to provide more security.