Banks should cover all material and significant risks under their stress testing program. For this purpose , they should identify the major risk factors based on the assessment of their portfolios and its inherent vulnerabilities. The possible risk factors may include those related to credit, market, operational, liquidity and other risks. Banks should also capture the effect of reputational risk as well as integrate risks arising from off-balance sheet vehicles and other related entities in their stress testing program.

Some possible stress scenarios for stressing various risk factors are described in the following paragraphs. The scenarios listed hereunder are only for the reference of banks and should not be construed as an exhaustive list. Banks are expected to develop their own risk factors taking into account the nature of their business activities and the risks associated therewith. They should also determine the methodologies and techniques to be used for stressing the identified risk factors in line with the requirements of these Rules and the prevailing best practices.