UPDATE: Police have taken a man into custody after responding to a reported siege inside a bank in the southern suburb of Byford.
The 51-year-old man surrendered himself to officers "without incident".
The confrontation at the Bendigo Bank branch on South Western Highway was reported just after 2.30pm when an alarm was triggered.
It is alleged that the man entered the bank and had a discussion with staff about funds. He is alleged to have become aggressive, before locking the doors to the bank and refusing to leave or let anyone else leave.
Shop owners in the same complex as the bank said they were locked in their business premises for about an hour without knowing what was happening.
Sean Corkery, owner of Eagle Boys Pizza, said police told everyone to lock their shops, stay inside and get ready for a potential evacuation.
“My first concern was for the girls in the bank. We know all three of them pretty well and were worried they may be in danger,” Mr Corkery said.
Mr Corkery said the TRG arrived within minutes and there were about 15-20 officers lined up along the highway with machine guns.
“It was quite mind blowing how quickly they got here and how many there were,” he said.
He said at one point he saw them fixing a steel bar to the front of the TRG vehicle and was wondering if they would ram the bank.
Another shop owner, who did not want to be identified, said there were about 20 officers and 12 cars.
“I’ve never seen anything like it,” he said.
The three women from the bank are giving statements to police.
Police issued a statement this afternoon to say the road would be closed.
"Due to an incident at the Bendigo Bank branch in Byford, South Western Highway is closed in both directions between Larsen Road and Blytheswood Avenue," police said.The road was reopened about two hours later.