A new commercially viable process to clonazepam has been reported. Chloroacetamide intermediate (I) was activated as the corresponding iodide (II) by Finkelstein exchange reaction with KI in acetone. Subsequent displacement by ammonia in EtOAc as the solvent afforded the glycine amide (III). Finally, cyclization of (III) in the presence of ethanolic pyridine gave rise to the title benzodiazepinone.