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Asmiya Mol, a Plus-One student of Al Amin Arabic College, was found hanging in the library of the college hostel on Saturday.
The alleged theft happened on Sept 22, according to the complaint. The family lost 60g of gold jewellery and Rs 1.25 lakh in cash, the money they were saving to build a house.
He is also fined Rs 1.75 lakh, which will be given to the survivor.
Modernizing madrasa education is a thorny issue in Pakistan, a deeply conservative Muslim nation where religious schools are often blamed for the radicalization of youngsters but are the only education available to millions of poor children.