There are grave fears for the welfare of Isabel Stephens, 89, and her daughter Judy Stephens, 53, who were last seen leaving the Tatong Tavern in northern Victoria about 1pm on Sunday.

Police announced on Friday a large search effort including members of the search and rescue squad, the air wing, the SES and the Department of Environment, Land, Water and Planning.

Police have already conducted an extensive search of local ranges and mountain terrain around Benalla with no trace of the pair.

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Isabel Stephens' other daughters Helen Stephens and Barbara Walter described the disappearance as "out of character" and said they believed their sister and mother had no intention of being gone for so long.

"We just can't get a grip on it at all," Ms Walter said on Thursday.

"They're very ordinary and lead very ordinary sort of routine lives. This has just shocked us terribly. We don't know what to think."

"It's almost like you're in a bad movie and you're going to wake up and everything will be OK."

"Judy not having her medication, that has serious health implications for her," added Ms Stephens.

"Your mind boggles because there's no answer. You can't imagine they would have driven any further afield because they don't do that generally."

Ms Stephens said her mother didn't like to drive in unfamiliar areas or at dusk because of kangaroos.

There have been a number of reported sightings which police are investigating.

Police are scouring waterways and bushland around Benalla for Isabel and Judy Stephens

Senior Sergeant Mark Byers said police had "no theory" as to where the women may have gone.

"It's quite completely out of character for both ladies, they're very well known local residents who have great knowledge of the area."

Christopher McCabe, owner of the Tatong Tavern where the pair had lunch on Sunday, said the women had spoken about visiting a relative for dinner that evening.

"They did not seem distressed in any way," he told Channel Nine.

This story first appeared in The Age.