Musa sp. cultivar Rasthali (Silk AAB) is a choice variety of the Asian sub-continent. Its production and sustenance are threatened by Fusarium wilt, which affects the livelihoods of small and marginal farmers. The use of quality planting material is one of the strategies to manage the disease. Availability of quality planting material for varieties other than Grand Naine is limited. Large-scale micropropagation using existing technologies is laborious and expensive. Temporary immersion bioreactor system is emerging as a potential advancement in the micropropagation industry. In this study, a cost-effective temporary immersion bioreactor (TIB) system has been developed and an efficient micropropagation method has been standardized. Explants cultured in TIB with 250 ml of culture medium in a 2-min immersion frequency of 6 h were found to be efficient for shoot proliferation and rooting. Its efficacy has been compared with the semisolid culture method. At the end of the 6th subculture, 1496 ± 110 shoots per explant were obtained in TIB. Chlorophyll, carotenoid, stomatal index, and the number of closed stomata were examined to determine the physiological functions of the plants grown in TIB and compared with semisolid grown plantlets. Plantlets grown in TIB were genetically stable and were confirmed using inter-simple sequence repeat (ISSR) markers. The multiplication of shoots in TIB was 2.7-fold higher than the semisolid culture method, which is suitable for large-scale production of planting material for commercial applications.