In the last few years a great technological advances in color printing, duplicating and scanning, counterfeiting problems have become more serious. In past only authorized printing house has the ability to make currency paper, but now a days it is possible for anyone to print fake bank note with the help of modern technology such as computer, laser printer. Fake notes are burning questions in almost every country. Counterfeit notes are a problem of almost every country but India has been hit really hard and has become a very acute problem. Fake Indian currency of 100, 500 and 1000 rupees seems to have flooded the whole system and there is no proper way to deal with them for a common person. There is a need to design a system that is helpful in recognition of paper currency notes with fast speed and in less time. Our system describes an approach for verification of Indian and other countries currency banknotes. The currency will be verified by using image processing techniques.