The study aims to investigate the effects of different drying methods on the changes in functional properties, physicochemical composition, bioactive compounds, antioxidant activity, sensory attributes, and microstructural quality of the banana flours. Two local banana cultivars, Mehersagar and Sabri, were dried to produce flour using four distinct drying methods: freeze drying (FD), cabinet drying (CD), microwave oven drying (MOD), and forced air oven drying (FOD). The functional properties of the developed banana flours were observed where the findings were as water holding capacity (0.93 ± 0.06–2.74 ± 0.04 g water/g dry sample), oil absorption capacity (0.87 ± 0.06–2.22 ± 0.10 g oil/g dry sample), swelling capacity (4.62 ± 0.02–5.05 ± 0.03 g paste/g dry sample), bulk density (0.54 ± 0.04–0.81 ± 0.02 g/ml), tapped density (0.62 ± 0.04–0.93 ± 0.03 g/ml) and Carr's Index (9.38 ± 0.47–13.58 ± 0.43%). Freeze-dried Mehersagar cultivar's flour showed the leading functional properties with good flowability and cohesiveness. The physicochemical parameters of the flours also revealed significant differences (p < 0.05) in lightness (L*) (50.51 ± 1.49–72.21 ± 1.05), moisture content (3.96 ± 0.09–7.74 ± 0.13%), protein (2.72 ± 0.07–3.93 ± 0.06%), crude fat (0.11 ± 0.01–0.36 ± 0.04%), crude fiber (0.64 ± 0.03–1.22 ± 0.03%), carbohydrate (84.15 ± 0.24–88.26 ± 0.15%) and energy content (354.25 ± 0.57–370.02 ± 0.39 kcal/g). Total flavonoid content (21.44 ± 0.04–34.34 ± 0.03 mgQE/100g) and phenolic content (29.91 ± 0.01–71.46 ± 0.03 mgGAE/100g) was observed, while the highest retention of bioactive compounds was exhibited in Mehersagar cultivar's flour. In terms of appearance, fineness, taste, flavor, color, and overall acceptability, the dried banana flour of both the cultivars obtained from freeze-dried scored overall acceptability 8.04 ± 0.02 and 7.92 ± 0.17, respectively. The scanning electron microscopy analysis of the microstructure of flour granules from each sample revealed a diverse morphological configuration in particle size and shape. According to the findings of this study, the freeze-drying technology is superior to others, and the Mehersagar banana cultivar is more satisfactory in terms of quality characteristics. Moreover, the quality parameters of banana flour may facilitate the formulation of different flour-based gluten-free baked products and food supplements.