This article argues that, starting from the late colonial period, the Indian state in its correlated attempts to regulate and streamline the operation of monetary markets in line with capitalist development policies and to remove exploitative credit market practices instead produced a binary between a monetary outside and inside. While the state's efforts were intended to delineate the boundaries of the outside produced in this way, removing competing segments of Indian capital from the expanding monetary system, this process of delineation contributed to an already existing divergence in the operational modes. Correspondingly, it reinforced a process of differentiation that centred on the removal of liberal-bourgeois contractual law from market governance on the monetary outside that was gradually substituted by a reputational economy of debt. The monetary outside so produced constitutes one specific form of capitalist outsides in the Indian economy, interpreted as economic arenas and (extractive) accumulation regimes that functionally and procedurally differ from the dominant capitalist economic sector in modern India with which they co-exist. Both historiographic and ethnographic approaches are used to study the related processes of delineation and differentiation in the production of a monetary outside, with a special emphasis on the United Provinces/Uttar Pradesh and the north Indian town of Banaras (Varanasi).