The present invention relates to an improved process for the synthesis of bendamustine, in particular , bendamustine hydrochloride of the formula (VI) and its intermediate l-Methyl-5-[bis(2-chloroethyl)amino]-1H-benzimidazol-2-yl]lithium butanoate of formula(V), both having a purity of >99%, which is simple, convenient, economical, does not use hazardous chemicals and industrially viable.