My sister overstayed in Europe by just five days. She misread the expiring date of the visa. When she was exiting through Germany, the border service made her pay a fine of €110. Does this mean she is banned the Schengen area?
It is possible for a member state to impose a Schengen-wide entry ban which will be be registered in the common Schengen Information System. But this requires that the subject of the ban is specifically informed in writing about the ban. Hopefully your sister has held on to all the paperwork she was given during the process.
Even if there is no formal ban, however, she should assume that the consular officers who examine future visa applications will know about the overstay; she will face a harder than normal task of convincing them that she intends to leave the Schengen area within the period stipulated by her visa.
The Schengen visa application form does not explicitly ask applicants to declare previous overstays -- but it will nevertheless be prudent to proactively provide an explanation as supporting material in a future visa application.