The Indian Rupee

The legal currency in India is the Indian Rupee (INR or ₹ or Rs.)

Money Exchange (Cash)

In general, Mumbai international airport and hotels have the worst exchange rates and charge higher commission/fees. Change only minimal required currency at these places.
In the Colaba and Fort area of Mumbai, there are many currency exchange counters. Many counters offer rates better than banks or hotel/airport. It is better and safer to exchange currency at reputable counters like Thomas Cook, Travelex, American Express, etc.
You can also exchange currency at banks, however will have to pay fees/commission. If you are changing large amounts of currency then it is worth checking around banks and Money exhange counters in Mumbai.

Credit cards

Your credit card provides you with the absolute best exchange rate for purchases in Mumbai. Please check beforehand with your bank for any additional fees on the top of the exchange rate for using your card in a foreign country before you decide to use you credit card. Please note that credit cards are not accepted in all establishements (especially small ones on the street) or cabs in Mumbai, so always carry some cash with you.

ATM

Many banks ATM machines in Mumbai allow cash withdrawal in local currency using an international ATM card like Visa/Plus and Mastercard/Cirrus. Please check with your bank for any additional fees for using your ATM card in a foreign country before you decide to use you ATM card.

Traveller cheques

Traveller's cheques are accepted by hotels, money exchange counters, and banks in Mumbai. Traveller cheques may be subject to a fee or commission.