Firstly, use strict. Use warnings. It's possible that your error could be related to that. (The other posters do have very good points, too.)

Secondly, your logic seems to be a little sketchy. You're doing the operations on @LOOP several times, once for each file. But, you never reset @LOOP. It's not a pattern-matching problem, but a logic issue. Instead, consider:

foreach my $record (@BLIST) {
    open(BAN, $record) or &Error($!);
    my @BAN = <BAN>;
    close BAN;

    my @tempLOOP = @LOOP;
    foreach my $line (@tempLOOP) {
        $line =~ s/FNAME/$record/;
        $line =~ s/BANNER/@BAN/;
        print $line;
    }
}
[download]

In addition, I would highly reccomend using the HTML templating modules that have already been written, vs. rolling your own. (That is what you're doing, right?)

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