The Office confirmed that Sarovic was arrested alongside a former manager of the Republika Srpska Stockpiles Administration, Milorad Govedarica.
Both will remain in custody for 24 hours, during which time they will be interrogated by the prosecutor.
The reasons for the arrests were not revealed, but local media speculated they were related to unlawful transactions of Privredna Banka from East Sarajevo.
The bank was managed for years by Momcilo Mandic, a former senior Bosnian Serb official. It has been established that this bank unlawfully funded the work of the Serb Democratic Party (SDS).
Mandic has been in custody in Sarajevo for months after an indictment was issued against him.
An investigation into the bank's operations directly linked Sarovic with unlawful deposits into the SDS account.
Sarovic was replaced as a member of the Bosnian state presidency two years ago on a decision by the international community's High Representative in Bosnia, Paddy Ashdown, over responsibility for the unlawful delivery of spare parts and military equipment to the Saddam Husein regime.