Express 24/7 correspondent Muhammad Rizwan said the incident took place in the early hours of the morning. Initially, the guard attempted to take bank employees hostage but proceeded to release them.
He then locked himself up in a bathroom inside the bank building.
Police and security forces waited three hours for him to come out, and used tear gas to hasten the process.
Police then broke down the bathroom door and arrested the guard, who had been firing at them periodically.
Police have started to interview the other guards and bank staff to investigate why the incident happened.
According to the bank's manager, the guard has been suffering from mental illness.
The bank building and fixtures weren badly damaged in the exchange of fire.
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