SÃO PAULO—The small Brazilian city of Criciuma was rocked by gunfire and explosions late Monday and early Tuesday when a heavily armed gang of robbers broke into a bank, took hostages and fired their guns indiscriminately to keep police at bay.

The group of about 30 gunmen made off with an undisclosed amount of money from the Banco de Brasil branch in the city’s center, leaving large amounts of cash strewn about the city’s streets as they fled the scene.

“It…