This article proposes an effective method for real-time banknote recognition, using digital image processing. The new Series 7 New Zealand banknotes are considered, as a case study, for intelligent real-time recognition. The composite feature of a banknote containing the elements of color and texture is extracted, and a three-layer back-propagation neural network is trained for classification. The proposed method has demonstrated excellent recognition results in an indoor environment and is comparatively less time-consuming that makes it suitable for real-time applications. This article fills in the vacancy of real-time recognition of the newly released paper currency. Practically, our proposed approach can be served as the uppermost for the future development of the prototype assisting the blind or the visually impaired in recognizing the new series of New Zealand banknotes.