1. Amyl acetate, isoamyl acetate, or a liquid mixture of amyl acetate and some other chemical. So named because it has a strong banana-like odor. It can be used as a solvent (e.g. nail polish remover), an essence in perfume*, and a flavouring agent. AKA pear oil.
2. 1920s slang for insincere flattery, nonsensical exaggeration, hokum, or bunk.
* Roninspoon reports that the military has used banana oil to test gas masks; the scent is strong, yet pleasant, optimal for testing vapour leakage.