I am asking this question on behalf of an Indian friend of mine.
My friend (A) is planning to sell a house. The prospective buyer (B) will take a bank loan to buy the house.
Now B suggests that an amount ~ 30% higher than the house price will be transferred to A's bank account. A should return the extra amount to B.
A has become suspicious of B's intentions. In India, the bank loan amount is usually around 80% of the house price.
In this case, the bank loan amount is 130% of the house price. It appears that B is trying to perpetrate some kind of fraud.
Is B really trying to deceive A and/or violating the Indian/Bank law?
Second Party Fraud
Section 17 in The Indian Contract Act, 1872
Operation of bank accounts and money mules
The Prevention of Money-Laundering Act, 2002
Money mules (p. 19)
Prevention of Money Laundering Act, 2002