Greek Finance Minister Yanis Varoufakis dismissed on Sunday media reports that Greece favored the imposition of capital controls starting most probably from Monday. "The Minister never made such a statement that the Greek government favors the imposition of capital controls," a ministry statement said on Sunday.

"On the contrary, he has repeatedly said that the government considers capital controls as incompatible with the monetary union," the statement said.

The statement came as media reports said that Varoufakis said during an interview on Sunday that the government was examining the idea, as depositors were lining up in front of ATMs since early Saturday fearing an imminent default and possible Grexit.

The government's surprise announcement on early Saturday that on July 5 Greek voters will decide in a referendum whether to accept or not a draft reforms for cash deal with foreign creditors, has fuelled fear over dramatic developments in coming hours.

As the Greek Ministry was releasing the statement the European Central Bank was discussing whether or not to keep supporting the liquidity of Greek banks.

Later on Sunday afternoon Varoufakis will hold a meeting with the central Bank of Greece Governor Yannis Stournaras and other Greek officials to discuss the situation of Greece's banking system.