Abstract: The present invention provide processes for the preparation of Bendamustine hydrochloride monohydrate of formula (I) The present application also provides a process of purification of Bendamustine hydrochloride or monohydrate to get substantially pure Bendamustine hydrochloride monohydrate crystalline Form-SM. The said Bendamustine hydrochloride monohydrate crystalline Form-SM is characterized by X-ray powder diffraction pattern comprising at least 5 characteristic peaks selected from the XRPD 2 theta degrees peaks at 7.42, 10.60, 11.17, 16.43, 17.94, 22.89, 26.33, 28.77, 30.28, 31.92, 40.89±0.1 2?°. The present application also provides a process for the preparation of Bendamustine hydrochloride monohydrate crystalline Form-SM useful in making pharmaceutical composition for the treatment of cancer or similar proliferative disorders.