Bash – Capistrano error “bundle: not found”

I'm trying to deploy octopress on a VPS but getting this error bundle: not found but bundle is installed!

Full error.

$ cap deploy
  * 2013-07-20 18:08:55 executing `deploy'
  * 2013-07-20 18:08:55 executing `deploy:update'
 ** transaction: start
  * 2013-07-20 18:08:55 executing `deploy:update_code'
    updating the cached checkout on all servers
    executing locally: "git ls-remote git@mydomain.com:website.git HEAD"
    command finished in 8348ms
  * executing "if [ -d /home/deploy/ruby_apps/website/shared/cached-copy ]; then cd /home/deploy/ruby_apps/website/shared/cached-copy && git fetch -q origin && git fetch --tags -q origin && git reset -q --hard de26553c0aa7ea583e0bfdec2c103ba83adbb793 && git clean -q -d -x -f; else git clone -q git@mydomain.com:website.git /home/deploy/ruby_apps/website/shared/cached-copy && cd /home/deploy/ruby_apps/website/shared/cached-copy && git checkout -q -b deploy de26553c0aa7ea583e0bfdec2c103ba83adbb793; fi"
    servers: ["mydomain.com"]
    [mydomain.com] executing command
^Acssh revers    command finished in 7161ms
    copying the cached version to /home/deploy/ruby_apps/website/releases/20130720123917
  * executing "cp -RPp /home/deploy/ruby_apps/website/shared/cached-copy /home/deploy/ruby_apps/website/releases/20130720123917 && (echo de26553c0aa7ea583e0bfdec2c103ba83adbb793 > /home/deploy/ruby_apps/website/releases/20130720123917/REVISION)"
    servers: ["mydomain.com"]
    [mydomain.com] executing command
    command finished in 1868ms
  * 2013-07-20 18:09:19 executing `deploy:finalize_update'
    triggering before callbacks for `deploy:finalize_update'
  * 2013-07-20 18:09:19 executing `bundle:install'
  * executing "cd /home/deploy/ruby_apps/website/releases/20130720123917 && bundle install --gemfile /home/deploy/ruby_apps/website/releases/20130720123917/Gemfile --path /home/deploy/ruby_apps/website/shared/bundle --deployment --quiet --without development test"
    servers: ["mydomain.com"]
    [mydomain.com] executing command
 ** [out :: mydomain.com] sh: 1:
 ** [out :: mydomain.com] bundle: not found
 ** [out :: mydomain.com] 
    command finished in 1431ms
*** [deploy:update_code] rolling back
  * executing "rm -rf /home/deploy/ruby_apps/website/releases/20130720123917; true"
    servers: ["mydomain.com"]
    [mydomain.com] executing command
    command finished in 1387ms
failed: "sh -c 'cd /home/deploy/ruby_apps/website/releases/20130720123917 && bundle install --gemfile /home/deploy/ruby_apps/website/releases/20130720123917/Gemfile --path /home/deploy/ruby_apps/website/shared/bundle --deployment --quiet --without development test'" on mydomain.com

I did google and found out about cap shell and then I found that the PATH variable isn't probably being set somehow

$ cap shell                                                                                                                                                         1 ↵
  * 2013-07-20 18:16:43 executing `shell'
====================================================================
Welcome to the interactive Capistrano shell! This is an experimental
feature, and is liable to change in future releases. Type 'help' for
a summary of how to use the shell.
--------------------------------------------------------------------
cap> echo $PATH
[establishing connection(s) to mydomain.com]
 ** [out :: mydomain.com] /usr/local/sbin:/usr/local/bin:/usr/sbin:/usr/bin:/sbin:/bin:/usr/games:/usr/local/games
 ** [out :: mydomain.com] 
cap> id
 ** [out :: mydomain.com] uid=1003(deploy) gid=1003(deploy) groups=1003(deploy),1005(rvm)
 ** [out :: mydomain.com] 
cap>

But when I ssh on deploy@mydomain.com

deploy@mydomain:~$ id
uid=1003(deploy) gid=1003(deploy) groups=1003(deploy),1005(rvm)
deploy@mydomain:~$ echo $PATH
/usr/local/rvm/gems/ruby-2.0.0-p247/bin:/usr/local/rvm/gems/ruby-2.0.0-p247@global/bin:/usr/local/rvm/rubies/ruby-2.0.0-p247/bin:/usr/local/rvm/bin:/usr/local/sbin:/usr/local/bin:/usr/sbin:/usr/bin:/sbin:/bin:/usr/games:/usr/local/games
deploy@mydomain:~$ grep source .bashrc
# sources /etc/bash.bashrc).
source /etc/profile.d/rvm.sh
deploy@mydomain:~$ rvm list

rvm rubies

   ruby-1.9.3-p429 [ x86_64 ]
=* ruby-2.0.0-p247 [ x86_64 ]

# => - current
# =* - current && default
#  * - default

deploy@mydomain:~$ gem list bundler

*** LOCAL GEMS ***

bundler (1.3.5)
bundler-unload (1.0.1)
deploy@mydomain:~$ gem which bundler
/usr/local/rvm/gems/ruby-2.0.0-p247@global/gems/bundler-1.3.5/lib/bundler.rb
deploy@mydomain:~$ 

I'm not sure what exactly am I missing here. I also tried adding source /etc/profile.d/rvm.sh to .bash_login but still no luck.