We propose a secure interlaced algorithm for RGB image encryption associated with Arithmetic Random Matrix Affine Cipher (ARMAC) in wavelet packet domain. In this approach, the arrangement of ARMAC parameters along with correct de-interlacing is mandatory for correct decryption. Computer simulation with standard example and result (security analysis) is given to analyze the capability and robustness of the proposed approach and comparison with existing methods are drawn. We have designed a highly secure algorithm wherein an RGB image can be encrypted with varied computational cost depending on the user, enabling real-time image encryption. Moreover, the proposed approach can be used in transmission of images over unsecured network.