The attackers attacked the banks of the small town of Aracatuba, east of Sao Paulo, northwest in the morning.
In order to distract law enforcement, thieves placed bombs all over the city. A man was seriously injured when the devices were detonated and lost both feet, according to police.
During the confusion, heavily armed thieves held three banks, taking hostages during the process.
The hostages were tied to the roofs and hoods of 10 cars to make human shields, police said.
Three people were killed in the incidents: two of them victims and an alleged robber, according to Sao Paulo military police. Five more were injured and two suspects were arrested and sent to prison.
A squad of more than 380 police officers is now searching for more than a dozen suspects who remain at large. School classes were suspended in the city, which has about 200,000 residents, after the blasts.
“They [the criminals] They had inside information that one of the banks had a lot of money, so they went to the city, “Sao Paulo public security secretary Alvaro Batista Camilo told CNN’s Brazil subsidiary.
Police said more than 20 heavily armed men carried out the attack, adding that the thieves used drones to control the streets as they entered the city and escaped, Reuters reported.
People were urged not to leave their homes until all the explosives were found and deactivated, Reuters added.
This is the latest in a series of bank robberies in Brazil. Last December, two similar raids took place on consecutive days in the cities of Cametá and Criciúma, according to Reuters, both at Banco do Brasil branches.
CNN’s Rodrigo Pedroso reported from Sao Paulo and Lianne Kolirin wrote from London.