Is there a restriction in opening and closing files inside a loop?

You aren't opening the files within the loop.

select only makes a particular, already open, filehandle the default for print.

But you are closeing those handles on the first pass, and they never get re-opened.

Two possibilities:

1. Don't close the files, just select between then:

       for ($i=1;$i<=$max;$i++){ 
          
            $pwd = &randomPwd($nmbchars);
            select (DB);
            print qq("$dept$w$i","7 days","$pwd",,,,,,\n);
   
            select (newDB);
            print qq("$dept$w$i"\t>\t"$pwd"\n);
   
        }
   [download]

2. Instead of selecting between them, supply the required file handle to the print statements:

       for ($i=1;$i<=$max;$i++){ 
          
            $pwd = &randomPwd($nmbchars);
   
            print DB qq("$dept$w$i","7 days","$pwd",,,,,,\n);
   
            print newDB qq("$dept$w$i"\t>\t"$pwd"\n);
   
        }
   [download]

Personally, I prefer the latter option.