Gather all ingredients.
In a large bowl, whisk together cold milk and instant vanilla pudding mix for 2 minutes.
Whisk in sweetened condensed milk until smooth.
Stir in vanilla extract.
Gently fold in the thawed whipped topping until fully combined.
Arrange a layer of vanilla wafers in the bottom of a serving dish.
Add a layer of sliced bananas over the wafers.
Spread a layer of pudding mixture on top.
Repeat layers of wafers, bananas, and pudding until all ingredients are used.
Cover and refrigerate for at least 1 hour before serving.
Top with crushed wafers just before serving, if desired.
Serve chilled.