This study investigated the nutritional and functional components of ‘saba’ banana peel (SBP) to determine its health-promoting potential for special food applications. SBP has undergone analyses measuring proximate composition, vitamin C, antioxidant activity, phytochemical content, estimated glycemic index (eGI), pancreatic lipase inhibition, and cholesterol micellar solubility inhibition. Data were processed using SPSS v20 and expressed as mean ± SD. Proximate analysis showed that SBP contained 83.83 ± 1.06% moisture, 6.74 ± 0.83% crude fat, 5.58 ± 0.24% crude protein, 9.97 ± 0.04% total ash, 9.91 ± 0.10% crude fiber, and 60.08% nitrogen-free extracts. Vitamin C content was found to be 72.15 ± 2.20 mg vitamin C/100 g fresh sample, whereas its antioxidant activity was 53.75 ± 1.29% DPPH inhibition. The eGI of SBP was 77.88 ± 1.42 and the phytochemical content analyses revealed that SBP contained total phenols at 135.61 ± 2.72 mg GAE, total flavonoids at 18.33 ± 0.65 mg catechin equivalent, and total tannins at 65.64 ± 1.97 mg quercetin equivalent. Finally, its pancreatic lipase inhibition was 35.34 ± 4.34%—almost 50% as effective as lipase inhibitor drug Orlistat. Its cholesterol micellar solubility inhibition was 71.40 ± 2.06%—almost 80% as effective as the cholesterol-lowering drug Cholestyramine. SBP had the highest phenolic content when compared with the published values of other fruit peels and far greater lipid-lowering enzyme inhibition effects than the healthy pigmented red and black rice varieties. These findings showed that SBP, which was considered as agricultural waste, contains nutritional properties and bioactive compounds, and can be utilized as food products and nutraceuticals with potentials in ameliorating obesity and associated disorders, providing banana farmers and processors additional revenue for their crops.