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The undergraduate curriculum at IIT Bombay is modelled after the curricula of the best universities in the world, and is truly one of the most exciting and versatile in India. It blends flexibility with academic rigor, allowing students to take up some courses of their own choice, both within and outside their departments, apart from completing a certain minimum requirement of “core” courses.     
Here at IITB, the academic year is divided into two semesters, each lasting about 16 weeks. Each semester, you have to complete a certain number of credits/courses. Based on your performance, you are assigned a grade at the end of each course. The weighted average of your grade points for all the courses in a particular semester gives your Semester Performance Index (SPI). The weighted average of these SPIs gives your Cumulative Performance Index (CPI). CPI gives an overall impression of your academic performance and plays an important role in course/project allotment in later semesters, not to mention internships and placements.     
A word of caution: The institute expects a minimum attendance requirement from the students (80%) for the courses. If a student does not meet this specific requirement, the professor is fully within their rights to award them an ‘DX’ grade, in which case one will have to repeat the course. So do make it a point to be regular in all courses. In case a student is unable to achieve the minimum cut-off marks in a particular course they fail and receive an FR grade.     
Exceptional performance in a course can even earn you the highly valued AP grade in that course. Awarded rarely to less than 1% of the class strength, it is a feather in a cap worth striving for.     
The most exciting part of the system, for any student interested in exploring interests outside their department, is the concept of Minors & Honors. Starting from third semester, you will be allowed to take up courses in any discipline that you might happen to be interested in (say, Electrical Engineering or Biology). You can earn a Minor in specific discipline by doing a certain number of extra courses in that discipline. Be warned that registration for Minor courses, particularly in ‘popular’ departments, is very competitive, with a seat-cap on all courses. If you are serious about your Minor ambitions, then be on your toes and maintain a good CPI right through your degree programme!     
The B.Tech students have the option of completing a certain number of these elective courses in their own department and earn a ‘B.Tech. with Honors’ degree. Honor courses give a better idea about your subject and discipline. Finally, if you happen to have any backlog(s), you will have to repeat (and this time around, hopefully pass) the course(s).