Greek banks will remain shut for an unspecified time and the country is imposing restrictions on bank withdrawals following a recommendation by the Bank of Greece, the country's prime minister has said.
Sunday's move comes after two days of long lines forming at ATMs across the country, following Prime Minister Alexis Tsipras' sudden decision to call a referendum on creditor proposals for Greek reforms in return for vital bailout funds.
Earlier, the European Central Bank decided not to increase the amount of emergency liquidity the lenders can access from the central bank - meaning they have no way to replenish fast diminishing deposits.
"It is now more than clear that this decision has no other aim than to blackmail the will of the Greek people and prevent the smooth democratic process of the referendum," Mr Tsipras said in a televised address to the nation.
The referendum is set for next Sunday. But Greece's current bailout expires on Tuesday, and the 7.2 billion euro (£5.1bn) remaining in it will no longer be available to Greece after that date.
Without those funds, Greece is unlikely to be able to pay a 1.6 billion euro (£1.1bn) International Monetary Fund debt repayment due the same day.
Tsipras gave no details of how long banks will remain closed or what restrictions will be placed on transactions. Two financial sector officials said the banks would likely remain shut for several days.