Even though the Basel Committee does have an algorithm that produces such a score, it recognized that there is inevitably imprecision involved, and thus will look for obvious breaks in these scores in order to assign the banks to a limited number of buckets carrying differing capital surcharges.
The major issues confronting the SHGs include inadequate number of quality agencies required for capacity building and hand-holding, governance and leadership challenges, lack of management information systems, inconsistent reporting, supervision and management capacities, excessive dependence on promoter agencies for essential services, skewed distribution of SHGs across the regions, decline of banking sector’s involvement in the programme with primacy being attached to financial inclusion programmes which have almost excluded SHGs from their focus, increasing incidence of NPAs, etc.