How can I restrict the normal user to run only limited set of commands in RHEL?

You can force the user to use a restricted shell.

Option #1 - How to: Configure User Account to Use a Restricted Shell ( rssh )

Option #2 - Here is a description made by RedHat how to do it in RHEL

Disclaimer : This is just a hack, not recommended for Actual Production Use

The normal user has been given permission to execute some commands which are available in /bin/ and /usr/local/bin/, So to remove those permissions and to restrict the user to run only particular set of commands, following steps shall be useful.

1. Create the restricted shell.

   # cp /bin/bash /bin/rbash
   

2. Modify the target user for the shell as restricted shell

While creating user:

    # useradd -s /bin/rbash localuser

For existing user:

    # usermod -s /bin/rbash localuser

For more detailed information on this, please check the KBase Article 8349

Then the user localuser is chrooted and can't access the links outside his home directory /home/localuser

3. Create a directory under /home/localuser/, e.g. programs

   # mkdir /home/localuser/programs
   

4. Now if you check, the user localuser can access all commands which he/she has allowed to execute. These commands are taken from the environmental PATH variable which is set in /home/localuser/.bash_profile. Modify it as follows.

   # cat /home/localuser/.bash_profile  
   # .bash_profile  
   
   # Get the aliases and functions  
   if [ -f ~/.bashrc ]; then  
   . ~/.bashrc  
   fi  
   # User specific environment and startup programs  
   PATH=$HOME/programs  
   export PATH
   

Here the PATH variable is set to ~/programs directory, as /usr/local/bin is binded to /home/username/bin and /bin is binded to /home/username/bin so replacing that.

5. Now after logging with the username localuser, user cant run a simple command too. The output will be like this,

   [localuser@example ~]$ ls  
   -rbash: ls: command not found  
   [localuser@example ~]$ less file1  
   -rbash: less: command not found  
   [localuser@example ~]$ clear  
   -rbash: clear: command not found  
   [localuser@example ~]$ date  
   -rbash: date: command not found  
   [localuser@example ~]$ ping redhat.com  
   -rbash: ping: command not found
   

6. Now create the softlinks of commands which are required for user localuser to execute in the directory /home/localuser/programs

   # ln -s /bin/date /home/localuser/programs/  
   # ln -s /bin/ls /home/localuser/programs/  
   # ll /home/localuser/programs/  
   total 8  
   lrwxrwxrwx 1 root root 9 Oct 17 15:53 date -> /bin/date  
   lrwxrwxrwx 1 root root 7 Oct 17 15:43 ls -> /bin/ls
   

Here examples of date and ls commands has been taken

7. Again login with user localuser and try to execute the commands.

   [localuser@example ~]$ date  
   Mon Oct 17 15:55:45 IST 2011  
   [localuser@example ~]$ ls  
   file1 file10 file2 file3 file4 file5 file6 file7 file8 file9 programs  
   [localuser@example ~]$ clear  
   -rbash: clear: command not found
   

8. One more step can be added to restrict the user for making any modifications in their .bash_profile , as users can change it.

Run the following command to make the user localuser's .bash_profile file as immutable so that root/localuser can't modify it until root removes immutable permission from it.

    # chattr +i /home/localuser/.bash_profile

To remove immutable tag,

    # chattr -i /home/localuser/.bash_profile

Make file .bash_profile as immutable so that user localuser can't change the environmental paths.