..asks Arvind:

However the bloc never really made progress beyond the annual posturing of the leaders of the member states. The main reason was that the two largest and most influential members -India and Pakistan - managed to derail the entire system by insisting on opening up the Kashmir issue at every forum including this one.
The smaller states also had their own peeves. Bangladesh was suspicious of Pakistan. Bhutan and Maldives never had any say in any of the matters - and have been accused within their own countries of openly towing India’s line. Nepal views India and its intentions with suspicion, and this coloured their dealing on SAARC as well.