Adding borders for image rounded image android

you can use drawCircle with another Paint object. For instance:

Paint paint = new Paint();      
paint.setColor(Color.RED);
paint.setStyle(Style.STROKE);
paint.setAntiAlias(true);
paint.setStrokeWidth(2);
canvas.drawCircle((source.getWidth() - margin)/2, (source.getHeight() - margin)/2, radius-2, paint);

Also, instead of using a drawRoundRect to draw a circle, you can use drawCircle

Final transformation class, thanks to blackbelt

public class RoundedTransformation implements com.squareup.picasso.Transformation {
    private final int radius;
    private final int margin;  // dp

    // radius is corner radii in dp
    // margin is the board in dp
    public RoundedTransformation(final int radius, final int margin) {
        this.radius = radius;
        this.margin = margin;
    }

    @Override
    public Bitmap transform(final Bitmap source) {


        final Paint paint = new Paint();
        paint.setAntiAlias(true);
        paint.setShader(new BitmapShader(source, Shader.TileMode.CLAMP, Shader.TileMode.CLAMP));

        Bitmap output = Bitmap.createBitmap(source.getWidth(), source.getHeight(), Config.ARGB_8888);
        Canvas canvas = new Canvas(output);
        canvas.drawCircle((source.getWidth() - margin)/2, (source.getHeight() - margin)/2, radius-2, paint);

        if (source != output) {
            source.recycle();
        }

        Paint paint1 = new Paint();      
        paint1.setColor(Color.RED);
        paint1.setStyle(Style.STROKE);
        paint1.setAntiAlias(true);
        paint1.setStrokeWidth(2);
        canvas.drawCircle((source.getWidth() - margin)/2, (source.getHeight() - margin)/2, radius-2, paint1);


        return output;
    }

    @Override
    public String key() {
        return "rounded";
    }
}