"We feel he needs to rectify himself and therefore he should be punished after considering all aspects," CPI(M) state secretary Surya Kanta Mishra said.
Banerjee, a Rajya Sabha MP, was suspended from the CPI(M) on June 2 for three months over allegations of leading a lavish lifestyle and a three-member internal inquiry committee was set up by the party to look into these.
The inquiry panel was scheduled to submit its report to the CPI(M) state committee by August. It submitted its report yesterday.
Asked about the recommendations on Banerjee's punishment, he said "These are internal matters of the party and I cannot disclose it. The final decision will be taken by the central committee."
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Banerjee was not available for comment.
This is not the first time that Banerjee has landed himself in trouble. In February, a party member had questioned his use of costly gadgets like Apple watch and Mont Blanc pen. Banerjee using his position as an MP had reportedly written to the employer of a party member complaining against him.
Meanwhile, the two day CPI(M) state committee meet, which ended during the day, decided to launch a "massive agitation" against the policies of the central government and the "misrule'" of the TMC government in the state.
Refuting reports about an inner party debate over the political-tactical line of CPI(M), Mishra said, "In every party congress we adopt a political-tactical line and we have to follow that line. We are a disciplined party and all of us need to follow the line that was adopted in the last party congress.