Case 1 : Basel III implementation of a bank.

Case Scenario :

'ABC' Bank is a 4th generation scheduled commercial bank in Bangladesh, engaged in retail banking, corporate banking and investment banking. The bank has been facing challenges in maintaining capital adequacy and liquidity due to increasing Non-Performing Assets (NPAs) and volatile market conditions. To strengthen its financial stability and comply with global regulatory standards, the bank has decided to implement the Basel III framework fully, issued by the Basel Committee on Banking supervision.

Recent data regarding Basel III for the bank are as follows :

(i) CET 1 is 3.5%, Tier 1 Capital is 5%, Capital to Risk (weighted) Assets Ratio (CRAR) is 7% and Capital Conservation Buffer (CCB) is 2%.
(ii) Leverage Ratio is 2.5%.
(iii) Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) is 90% and 101% respectively.

As an expert, you are required to analyze how 'ABC' Bank can adopt Basel III principles to enhance Capital Adequacy, Liquidity Standards and its effective risk management-addressing the following questions :