COMBINE sweetened condensed milk and water in large bowl. Add pudding mix; beat until well blended. Chill 5 minutes.
FOLD in whipped cream. Spoon 1 cup pudding mixture into 2 1/2-quart glass serving bowl.
TOP with one-third each of the vanilla wafers, bananas and remaining pudding. Repeat layering twice, ending with pudding mixture. Chill thoroughly. Garnish as desired.
For fun individual pudding desserts for guests; prepare mixture and layers in individual serving dessert dishes or cups with stems. Serve chilled.