Greek Prime Minister Alexis Tsipras announced Sunday that the country's crisis-hit banks will be shut on Monday and capital controls imposed to prevent withdrawals, after cash machines ran dry.
The emergency measures were agreed at a cabinet meeting after a gathering of Greece's systemic stability council, called after Eurogroup eurozone finance ministers refused to extend its bailout beyond Tuesday, sparking default fears over an IMF loan repayment due the same day.
The European Central Bank (ECB) subsequently left its Emergency Liquidity Assistance (ELA) financial lifeline for Greek banks unchanged on Sunday.
"This decision (by Eurogroup) led today the ECB not to raise ELA for the Greek government and made the Bank of Greece ask for the activation of measures of bank holiday and restriction of bank withdrawals," Tsipras said in a statement that also called again for an extension to Greece's current bailout programme.
The Greek stock market will also remain closed on Monday as part of measures designed to prevent fresh panic.
Ahead of the announcement, Greeks raced Sunday to find functioning cash machines in an increasingly anxious run on the banks, as speculation mounted over impending drastic restrictions.
"It's more than obvious that this (Eurogroup) decision has no other goal than to blackmail Greek people ... and to raise obstacles to the democratic process of the referendum," Tsipras added in the statement.
"People's deposits are safe, totally safe. Equally safe is the reimbursement of salaries and pensions.
"Any difficulties that may arise must be dealt with with calmness.
"The more calm we are, the sooner we will get over this situation."
Tsipras added that he had again asked for "the prolongation of the programme this time from the president of the European council and the 18 leaders of the other eurozone member countries, as well as the chief of ECB, the Commission and the European Parliament."
"I wait for their immediate response to a basic democratic demand for the Eurogroup."
Around 40 percent of all cashpoints in Greece have run out of cash, a source said earlier this afternoon.