What are RBI floating rate bonds?

[Rishabh]

How do RBI floating rate bonds operate, and how do they differ from fixed-rate bonds? Furthermore, what mechanism determines the adjustments to their interest rates?

[Reema]

The interest rate of RBI Floating Bonds varies every 6 months (January 1st and July 1st), unlike the fixed-rate bonds, after ensuring the return reflects current market conditions. The RBI links these rates to the National Savings Certificate (NSC) rate, with a fixed spread added.