A gang of three disguising themselves as customers looted the cash from the Nagdhunga-based Sabhyata Money Transfer at gunpoint at 11 am today.
Locals chased the burglars, arrested one and handed him over to the police while the two are still at large.
Related story
Two persons arrested with illegal cash and gold from Sarlahi
According to Gajur Siddhi Bajracharya, spokesperson for the District Police Office, Kaski, the locals, in the course of retaliation, arrested Prashanta Thapa of Dharan, currently staying at Pokhara Rambazaar, and handed him over to the police.
Police have recovered a pistol from him.
Police said they are searching for the other two fugitives.
The incident took place while the SAARC ministerial level meeting is taking place in Pokhara with high security alert.
