On the front cover of the stereo version, the banana is positioned lower.
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“◀︎ Peel slowly and see”
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Cover with peeled back sticker, revealing a flesh-colored banana underneath
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Back cover of the original 1967 pressing. From Wikipedia:
When the album was first issued, the main back cover photo (taken at a performance of Warhol's event Exploding Plastic Inevitable) contained an image of actor Eric Emerson projected upside-down on the wall behind the band. Having recently been arrested for drug possession and desperate for money, Emerson threatened to sue over this unauthorized use of his image, unless he was paid. Rather than complying, MGM recalled copies of the album and halted its distribution until Emerson's image could be airbrushed from the photo on subsequent pressings. Copies that had already been printed were sold with a large black sticker covering the actor’s image.
He designed his first major cover when MGM Records approached him to assist Andy Warhol with the removable banana peel featured on the cover of The Velvet Underground & Nico; with his adhesive experience, Braun developed the materials used to create the cover. Warhol then became something of a mentor to Braun in the late 1960s.
Andy wanted to take that banana painting and put it on a cover for the first Velvets album, but didn’t know how to best accomplish that, so I was quickly recruited by MGM Records. I developed a special pre-coated label stock with removable adhesive, so when the banana was “peeled”, the shocking-pink fruit was revealed! Andy and I became good friends, fast.
I have added Braun’s name to the design credits (he’s not mentioned in the album) and used the opportunity to add more and bigger images, including such showing a close-up of the sticker and the pink banana underneath.
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Over at Daylight Fonts, Shin Oka published a post with correspondence he had with Craig Braun. According to Braun, he was the one who “came up with the idea of a pink banana coming out of the sticker.”
Wikipedia describes Braun’s role as follows:
In a 2018 article by Long Live Vinyl, Braun recalls:
I have added Braun’s name to the design credits (he’s not mentioned in the album) and used the opportunity to add more and bigger images, including such showing a close-up of the sticker and the pink banana underneath.