Banana is one of the major cash and fruit crops of Pakistan. The lack of information concerning genetic diversity and purity within locally cultivated banana varieties is a major bottleneck in improving its genetics. Due to the existence of a narrow genetic background, it’s quite important to find genomic variations in banana varieties. DNA marker-based techniques have been used to effectively characterize banana varieties. In the current study, Inter Simple Sequence Repeat (ISSR) markers were used to characterize banana cultivars and to assess the genetic diversity of 14 local banana varieties grown in Pakistan. Out of the 45 primers used, 40 primers revealed reproducible results and produced 121 polymorphic bands, which contributed a ratio of 47.87 polymorphism. The ISSR UBC-835 and UBC-834 possessed the highest PIC ranged between (86–88%) in banana varieties, while the lowest PIC (46%) was detected in the case of UBC−857 marker with (100–1500 bp) PCR product size. Pairwise Jaccard’s similarity coefficient values were also calculated, and these were ranged from 0.56–0.88. Multivariate analysis divided 14 banana varieties into two distinct groups—A and B respectively—and furthermore into subgroups, clusters, and sub−clusters. Our results indicated that at the molecular level, the banana varieties in group—A were found to be 66% similar whereas in group B were 88% similar. Nei’s genetic diversity, PCA analysis, and a minimum spanning tree depicted Fenjiao, Dajiao, and NIGAB-2 as the most diverse members as compared to all other varieties of the three populations. Out of 14 varieties used, 11 varieties were uniquely identified by 54 polymorphic ISSR bands of different sizes. Some varieties like NIGAB-2 and NIGAB-3 were uniquely identified only with one band while others were tagged by multiple unique bands. In future, this study will be utilized to establish a molecular-based protocol for the identification of banana varieties.