This is a slow effect, that does not have any immediate effect during the combat but which will, in time, kill the victim. This ability is often associated with Creatures/Types/Undead, like Mummy Rot or the knives of the Nâzgul.
When you wound a target, expend two Magic points to infect him with Bane. The target now is very difficult to heal. All attempts to recover WoundPoints have a difficulty equal to your Powers, and only the Outcome reduces the victim's Wound Points. Each day, you are allowed a Powers roll against the target's Constitution, and the Outcome is Wound points the target takes. This will make him weaker and weaker, killing him in the end.
There is always some specific way to remove the bane you inflict. This is mainly a plot device. Divination: Remove Curse or the knowledge element of Powers can find out how it is done. The way to remove a bane can often be a mini-quest in itself, though strong healing powers might work, especially if performed at some sacred site.