Supple term used to describe activities or chat that is playful, intelligent and original. Banter is something you either posses or lack, there is no middle ground. It is also something inherently English, stemming as it does from traditional hi-jinks and tomfoolery of British yesteryear.
"You, sir, are drunk"
"Maybe so but you are ugly and I will be sober in the morning"
"Good banter sir"

Es como huevear entre amigos pero con respuestas "ingeniosas", como los típicos "turn down for what". O a veces ni es entre amigos.