An apparatus for processing paper sheets comprises a batch feeder for carrying the withdrawn paper sheets, a takeout device for picking up the paper sheets from the batch feeder, one by one, an inspection section for inspecting the paper sheets picked up by the takeout device, whereby the paper sheets are classified into two groups, an unmachinable first group and a machinable second group, a first collecting device for collecting the first group of paper sheets, and a judgment unit for classifying the second group of paper sheets into two subgroups, a legitimate third group and a counterfeit fourth group. The first collecting device includes a second collecting device for collecting the third group of paper sheets, and third collecting device for collecting the fourth group of paper sheets.