The victim H Munnisa Begum, who lived with her daughter and her grandson, was found murdered at her residence here, they said.
According to police, while stepping out of the house this morning, her grandson had seen her talking to the milk vendor, who was asking her to lend him some money.
However, when he came back a couple of hours later, he found his grandmother dead inside the house.
Her gold ornaments, including bangles, ear-rings and chain were also missing, they added.
The milk-vendor has been taken into custody for interrogation, police said.
Police suspect that the woman might have been strangulated.