Van Geneugden, who was appointed in April, is preparing for a 2019 Africa Cup of Nations qualifier against Comoros on 10 June.
Banda, who plays for local side Kamuzu Barracks, has captained the Flames for their last three matches.
"His form has dropped and his club aren't playing the style of football I'm looking for," the coach explained.
"I think it will be a strong group that is ready to play the passing game and stick to the game plan.
"We have a strong squad, we selected the players because we think they have the technical skills to give quality to the group."
Striker Chiukepo Msowoya is another notable omission from the 27-man squad, he has failed to score in six months for his South African club Golden Arrows.
Goalkeeper Owen Chaima who plays for Mbeya United in Tanzania, makes a return to the Flames after over a year on the sidelines.
Malawi Squad:
Goalkeepers: Lemani Nthala (Kamuzu Barracks), Charles Swini (HBC Songo, Mozambique), Ernest Kakhobwe (Nyasa Big Bullets), Owen Chaima (Mbeya United, Tanzania)
Defenders: Denis Chembezi (Wizards FC), Stanley Sanudi (Beforward Wanderers), Limbikani Mzava (Golden Arrows, South Africa), Francis Mlimbika (Beforward Wanderers), Pilirani Zonda (Nyasa Big Bullets), Yamikani Fodya (Nyasa Big Bullets), John Lanjesi (Nyasa Big Bullets), Chisomo Mpachika (Silver Strikers)
Midfielders: Simeon Singa (Wizards FC), Chikoti Chirwa (Red Lions), Gerald Phiri Jr (Platinum Stars, South Africa), Levison Maganizo (Wizards FC), Robert Ng'ambi(Platinum Stars, South Africaa), Yamikani Chester(Beforward Wanderers), Dalitso Sailesi (Nyasa Big Bullets), Micium Mhone (Blue Eagles), John Banda (Ferroviario de Nampula, Mozambique), Frank Banda (HBC Songo, Mozambique)
Forwards: Binwell Katinji (Silver Strikers), Innocent Bokosi (Red Lions), Jabulani Linje (Beforward Wanderers), Gabadinho Mhango (Bidvest Wits, South Africa), Richard Mbulu (Costa do Sol, Mozambique)
New Malawi coach Ronny van Geneugden has dropped captain Davie Banda from his first squad.