Its history dates back to ancient times, when it was called Pushpawati. This name was derived from the abundance of flowering plants in the region (Pushp means flower in Hindi, Pushp + wati means a place where flowers are in abundance).
The name "Banur" is from the name of a local deity, Mai Banno. A temple to Mai Banno stands in the town and is revered by all, irrespective of their religion. A legend has it that Mai Banno was a better musician than Tansen, the great musician in the court of the Mughal Emperor Akbar. She could cause rains by singing Raga Megh Malhaar, and could light lamps by singing Deepak Raag. During Mughal times, it was a sizeable town along with its neighbor Chatt. Banda Singh Bahadur reduced it to ruins on his way to Sirhind. Some people call it a 'theh' or ruin. Its varying topography above the surrounding countryside is a tell tale sign of the tumultuous event. There used to be a sizeable Muslim population before partition. There is a grave of a pir in the town and the fields were dotted with dipilliatated structures. The mosque fell during 1990s due to ravages of time and weather. A historic Gurudwara is situated in the south of the town. In the past, the parts of the town were known by localities (Mohallas). For example- Mohalla Ahluwalian, Jainian etc. Though called a town, Banur had a feel of a village life and in reality, was more like a large village. A small market, with about 2 dozen shops, provided basic amenities.
The language spoken by natives is the Puadh dialect of Punjabi with sprinkling of Manjhi brought in by West Punjabis after the partition.
Banur has a very big Gurudwara on Chandigarh Patiala Highway near to Bus Stand. The Gurudwara organizes various religional functions every year .
Banur is now developing at a very high pace. It has become the next Institutional Hub of Punjab due to Engineering, Medical, Nursing, Management colleges in this area.It has 3 engineering colleges with in the range of 10 km.