Bananastan is a capital side that existed at the same time as the original kingdom of Faq. In IPTSF Text 32, Jillian states that it has a huge treasury, enough to fund Faq for a long period of time if captured. There was always money in Bananastan.
Real World References
Bananastan appaears to be a portmanteau of "Banana" and "-stan". A small country that has only a single economic support, usually agriculture based, is called a Banana Republic. After the fall of the USSR, a number of the Socialist Republics became independent countries. It is very common for those countries in the south of the continent of Asia, usually near the Himalaya Mountains to have the affix "-stan" as part of their names.