The Ministry of Finance's 1 trillion yuan ($160 billion) debt swap line has been assigned to local governments, deputies to the National People's Congress (NPC) said on Thursday.

The ministry has recently confirmed a debt restructuring program that lets local governments convert some of their most urgent debts into municipal bonds with a longer tenor.

The ministry has confirmed a swap totaling 1 trillion yuan that will begin this year. Each province will be assigned a quota for replacing its soon-to-mature debts with bonds issued to commercial banks and other financial institutions.

So far 50 billion yuan were granted to South China's Guangdong Province, 40 billion yuan earmarked for East China's Shandong Province, 30 billion yuan for East China's Anhui Province and 20 billion yuan for East China's Jiangxi Province, the Economic Information Daily reported on Thursday, citing NPC deputies from these provinces.

The restructuring quota is granted based on existing liabilities set to come due this year, said Zeng Zhiquan, director of Guangdong's department of finance and an NPC deputy.

The debt restructuring program also triggered a rally of banking stocks on the Chinese mainland on Thursday as investors see it as a positive development to improve bank balance sheets, especially those that have lent heavily to local governments.

A government audit of local government debt as of June 2013 shows 2.78 trillion yuan of debts will mature this year, two-thirds of which are a direct liability for local governments. Total debt for local governments, including contingent liabilities, currently stands at 17.9 trillion yuan.

The ministry said the program would save local governments up to 50 billion yuan in interest payments.

Extending the maturity of debt will significantly ease the burden for local governments.