Normal arena is divided into leagues (Epic, Mythic, Eternal,...) and each of this leagues is divided into a couple of divisions. To progress from say Legend to Mythic league you must fight through all the divisions in the Legend league, from the last division to division 1 and then once you fight through Legend league divison 1 you are put into Mythic league divison 8 (or the last one, I dont know how much divisions each league has).
The banned league is a separate section of arena, where you are put once you are banned from normal arena. I am not there but I think it is divided into leagues and division like the normal arena.
If you are in the normal arena you only fight against players in the normal arena.
If you are in the banned arena you only fight against players in the banned arena.
So the question "Which division is the banned league?" is kind of hard to answer since all the divisions are normal or banned depending on which arena you are currently in.