A: A rapist or a molester with a very small penis. Usually of Spanish or Mexican decent i.e. the spanish naming. Bajo, refering to short and Bandito, refering to a common bandit or robber, literally meaning, "The Short Bandit".
B: Any person of spanish decent with a small penis.
Lisa: "So that bastard Ricardo raped you girl?"
Marisol: " Yeah chica, but that puta was El Bandito Bajo."
In most situations involving a Bandito Bajo both women, or men, end the conversation in racousious laughter, or tears, if said Bandito was a family member.