
If one gets a D band and his/her VP is taken off from the CTC, in the subsequent year, if the band improves is it going to be restored back?

Never.With current hike, it may never happen.
Let's take an example C- 3%, D- (-1%) , A -5%
Associate1 - C and C Assocaie2 - D and A Initial Salary - 100
So, Ass1 = 100×1.031.03 =106.09 Ass2 = 1000.99*1.05 = 103.95

I am talking about the variable component in the compensation and not the annual increment

So I felt in case D , resign next day . Atleast we may have a better salary to search outside than lesser salary once the paper release

No, with the D banding, the associate’s entire variable portion (fixed monthly payout plus the quarterly payout) was reduced/removed in the revised compensation letter.

First of all, QVA cut won't happen with D. It's a cut from all components. So where you restore, all increase everywhere
Sometimes back, there was a correction in promotions when the salary range is too low. Nowadays, it's just a fixed %.
