The companywants to develop the new zero-carbon community on 1,200 acres of brownfield land. The plans include proposals for 1,000 affordable homes.
Banks is also bidding for permission from the Department for Communities & Local Government to build a number of eco-towns south of the border.
Colin Anderson, managing director of Banks, said the plan would breathe new life into a declining community. "Scotland has so many old industrial villages, fragmented communities stripped of ambition which are crying out for redevelopment," he said.
Jim Tolson, Lib Dem spokesman for communities and MSP for Dunfermline West, welcomed the plans.
He said:“I welcome the plans for Cardenden to turn away from its high pollution past, back when it was a key mining town, and embrace a modern and more ecologically friendly future.
A motion calling for 27,000 affordable homes inScotlandby 2011 will be debated at the party's spring conference in Aviemore, and Mr Tolson called for eco-towns to contribute to the total.