BEIJING (Reuters) - China's ability to boost economic growth is vital for lowering debt levels, a banking regulator official said on Thursday.

Banks' bad loan ratios are rising but are still at relatively low levels, the official said, adding that banks have written off 2 trillion yuan ($304 billion) worth of bad loans in the past three years.

A debt-for-equity swap program that would help ease company's debt burdens and let banks convert bad loans must follow market and legal principles, a state planning official said.

"Zombie firms" and companies with poor credit records will be excluded from the debt-to-equity swap program, the official said, adding that the plan has yet to be finalised.

Chinese commercial banks' non-performing loans (NPLs) rose to an 11-year-high of 1.4 trillion yuan, or 1.75 percent of total bank lending, by end-March, data from the country's banking regulator showed.

China's central bank is investigating the accuracy of NPL data at banks, underlining policymakers' concerns about rising debt in the country.

(Reporting by Kevin Yao; writing by Elias Glenn)