Mirsad Hodzic, who obtained Bosnian citizenship, was a member of the notorious El Mujaheed unit of foreign Islamic volunteers during the 1992-1995 war, which was known for atrocities and criminal activities.
At the time, he was known as Abdallah Hany.
The 46-year-old was indicted for involvement in taking at least five ethnic Croat civilians hostage in October 1993 with the aim of exchanging them for detained members of his unit, a prosecutors' statement said.
The hostages were held at the unit's training camp in Orasac near Travnik, where they were tortured and beaten.
The suspect, who lives in the Travnik area, has not yet been arrested but has been questioned, a spokesman for the prosecution said.
Although allies against ethnic Serbs during most of the 1992-1995 war, Bosnia's Muslims and Croats fought against each other in 1992 and 1993.
Bosnia's inter-ethnic war attracted hundreds of Islamists from across the world to join Muslim forces in the fighting.
The 1992-1995 in the former Yugoslav republic claimed some 100,000 lives.
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