A website banned by Google placed my website link in it will it effects my website traffic.
If it effects, what is the solution for it?
Please note that I my self not placed the link in his website through link building, so that I can remove the link from website, but he placed my link in his website for the content of my website, so how can I solve this problem or remove my link from his website?
it depends on several other factors, for example how much "google trust" your site has overall. My simplified take is : if it's the only link to a page, it may hurt, if the page already enjoys few good no-nonsense references - should have no effect on SERPS.
It shouldn't affect you just as long you do not link back to it. I believe that is the Google stance on one-way links. If it is a banned site they will probably just ignore it but then again, I don't work for Google.
Agree with other responders; the only thing you might want to do is to enhance your website to attract more high quality links, because a few more links from bad neighborhoods could harm you even though you did nothing wrong.