After international creditors refused to extend Greece's bailout, Athens stock exchange and banks are set to remain shut on 29 June.
As the crisis further deepens, with Greece unable to come to an agreement with the European Union and the International Mnetary Fund, capital controls are to be introduced by the government.
The blame is being placed on the European Central Bank that refused to further channel funding despite the deposit outflows.
"This decision led the ECB today to limit the liquidity of Greek banks and forced the central bank of Greece to propose a bank holiday and a restriction on bank withdrawals," said Prime Minister Alexis Tsipras in a televised address, reported Reuters.
Tsipras called ECB's decision to reject Greece's extension "an unprecedented act".
ECB took the decision on 28 June to cap the emergency funds and keep the funding at the same level.
"We continue to work closely with the Bank of Greece and we strongly endorse the commitment of member states in pledging to take action to address the fragilities of euro-area economies," said ECB chief Mario Draghi.
Meanwhile, a protest in Athens called for Greece to walk out of the EU.