A car that drove down a footpath in a frightening incident in Melbourne's CBD on Tuesday night had no intention of hitting pedestrians and may have been targeting financial institutions, police have said.

The chaotic scenes were captured on video, with the event ending only when the erratic driver crashed into the casino.

Police said they received triple-0 calls reporting a car was being driven erratically along Swanston Street about 11:20pm.

Video footage believed to be taken during the incident shows the white SUV (sports utility vehicle) going down the footpath, forcing bystanders to get out of the way.

The car deliberately stopped and crashed into two banks on Swanston St and another financial institution nearby, before driving into the basement carpark at Crown Casino.

"Inside Crown Casino the vehicle has driven through some glass doors and parked at the base of the escalator," Inspector Stephen Cooper from Victoria Police said.

Police arrested a 34-year-old Burwood East man in the gaming area and he was taken to hospital for assessment for an illness.

The man has been charged with a range of offences including five counts of criminal damage, conduct endangering life, dangerous driving, possession of a weapon and committing an indictable offence while on bail.

Shattered glass in the doorway of a Commonwealth Bank after the crash. ( ABC News )

Inspector Cooper said it appeared the driver went out of his way to avoid people.

"The car stopped for a pedestrian to allow the pedestrian to cross over in front of it before proceeding on," he said.

"We are assured that, because of the fact the vehicle did stop, the intention was not to cause harm to any of the pedestrians."

He said they had contacted the three businesses targeted to investigate whether they may have been any connection to the driver.

The man left a trail of destruction on Swanston St. ( ABC News )

'Lucky nobody got hurt' rough sleeper says

Stuart, who was sleeping rough on Swanston St, said he and others were yelling at the driver but luckily there weren't many people on the street.

"The car went up the [tram] tracks and crashed into a couple of buildings, got to the corner and looked like he went to turn up China Town [Little Bourke St]," he said.

"It all happened very quick. As he backed up he went up on the footpath, we got most of the people off there and we were yelling and screaming for him to get off the path.

"He was just going slow, he came up on the bike path, hit the building and went to the next one and crashed into the next one. I think there was people in front of him and he was trying to get going.

"Anyway we're lucky. Nobody got hurt."

Temporary bollards were installed in the area over the weekend in response to recent incidents in the city and terror attacks abroad.

In January, a car drove into pedestrians on Bourke Street, killing six people.

When asked how the driver managed to make it to Crown Casino, Inspector Cooper said police responded quickly to the triple-0 calls but chose not to pursue the vehicle.

"Our response was timely, we made sure we had a cordon up in place so the person wasn't able to leave any further locations or impact on the public," he said.