Warana Agricultural Goods Processing Co-operative Society (WAGPCOS), a unit producing banana puree at Amritnagar gives out the banana peels along with the foul bananas as a major waste. This waste was tested for its sugar content and was found to contain substantial amount of sugars with hardly any hazardous material for the fermentative microorganisms i.e. yeast. To utilize this waste as a fermentation substrate, extract was prepared from the waste. Highly flocculant yeast Saccharomyces uvarum (NCIM culture 3528) having a high fermentation activity was used for the fermentation. A multi vessel system was prepared for the fermentation of waste extract. The system consisted of a main reactor, a buffer vessel and a separation vessel. The fermentation was carried out under anaerobic conditions with CO, bubbling and well maintained pH and temperature. Runs wen carried out at different feed rates with continuous yeast eel recycle. It was observed that the waste banana peels are capable of providing enough sugar for the fermentation and hence can be economically utilized for the ethanol production. After the removal of the extract from the waste, the remaining fibrous material can be dried in an easier way and can prove to be a good fodder for the animals.