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This paper presents the design of a machine vision based system for real time detection of the counterfeit Bangladeshi bank notes. The proposed system works with the denominations of five hundred and one hundred taka. This system relies on a specific feature of the both five hundred and one hundred taka. The relied feature is not possible to replicate for the counterfeit makers or producers. And there is no foreseeable likelihood that they would be capable to imitate this feature even within a pretty long time. The relied feature is the repeatedly printed ldquoBANGLADESHBANKrdquo on some portions of the notes using microprint technique. The proposed stand alone system captures the portions of the notes with a proprietary scanner called the Grid Scanner . The captured image is then processed by a microcontroller PIC-16F648A or ATMega88 (AVR). The microcontroller then determines the validity of the note based on an OCR technique by looking for the characters dasiaBpsila, dasiaApsila and dasiaNpsila in the scanned image. The success-rate of the counterfeit detection with properly captured image is 100% and the average processing time is 250 milliseconds with above mentioned microcontroller.