Calling the files in your code $file2 and $file1 doesn't help us to see which one is supposed to be "data" and which is supposed to be "search". Is this the sort of thing you are after:

#!/usr/bin/env perl 
use strict;
use warnings;

my $data = <<EOT;
hostname
banner exec
EOT

my $search = <<EOT;
hostname XXXXX
banner exec **********************************************************
+********************
banner exec</>
banner exec This device belongs to the
EOT

for my $substr (split /\n/, $data) {
    for my $line (split /\n/, $search) {
        print "Matched '$substr' in '$line'\n" if index ($line, $subst
+r) > -1;
    }
}
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