Former Cypriot finance minister says Greek banks would 'close in half an hour' if no deal is reached

Greece's banking system is flirting with collapse as Athens and its European creditors enter emergency talks to hammer out a bailout deal before a major debt repayment due on June 30.

As the deadline looms, Greeks are withdrawing money from their accounts at an unprecedented rate, draining 4 billion euros from the banking system just last week, Reuters reports.

The dramatic outflow forced the European Central Bank to approve a second round of emergency liquidity assistance (ELA) on Friday to keep banks afloat. However, that funding could be cut if Greece continues to reject demands for austerity measures and defaults on its €1.6 billion International Monetary Fund loan at the end of June.

If the European Central Bank does not authorise more emergency liquidity assistance, banks might have to shut down, Cypriot economist Michael Sarris told Reuters.

Banks "would have to close in half an hour," Sarris said.

Sarris was Cyprus' finance minister in 2013 when the Mediterranean island's banks had to be rescued from a collapse. Strict limits on the amount of cash that could be withdrawn from banks, known as capital controls, had to be implemented to prevent a bank run.

Greece has said it will not impose capital controls, according to Reuters, although a report last week suggested other European countries are ready to pull the trigger.

Greece this weekend submitted a new set of proposals to unlock €7.2 billion ($8.2 billion, £5.16 billion) in bailout money and is meeting with European leaders in Brussels on Monday to discuss the details.