Banks (29) was named in the Highlanders squad yesterday and will come back to a squad with aspirations to go all the way.
Banks will return from Japan in the new year and will be one of three candidates to wear the No10 jersey for the side. Josh Ioane and Bryn Gatland are the other two first five-eighths in the squad.
Banks said from Japan yesterday he had been thinking about coming home almost as soon as he left.
"It has been playing on my mind almost as soon as I left for Italy. After the 2017 season, the Highlanders have a special place in my heart. New Zealand has a special place in my heart," he said.
"To come back and play in front of friends and family, my mum, is a massive motivating factor for me and my rugby. For her to be able to come down and watch rugby."
Banks left to play in Italy and, after playing a season for Benetton, moved to Japan on a three-year deal with NTT Docomo Red Hurricanes.
But a deal has been brokered to get Banks to turn out for the Highlanders next season.
Banks, who played 33 games for the Highlanders in 2015-17, is looking forward to catching up with old friends and putting the jersey back on.
"The Highlanders are special ... it makes it an enjoyable time. I get a bit of stick from most of them but that is life. I'll take it on the chin and just move on."
He said to come back was an easy decision to make.
"It was more just working through - I have signed here for three years - so it was about getting all the OKs from the different parties. That is all done now. So I'm stoked that I'm coming home to play for the Highlanders again."
Being the senior pivot around the other two options at first five-eighth will put more responsibility on Banks.
"I'm probably nearly double their age ... those boys [Gatland and Ioane] have been awesome this season. Hopefully, I can teach them a thing or two and they can teach me a thing or two."
Highlanders coach Aaron Mauger said Banks would be pivotal for many of the players around him and he was looking forward to working with him.