The traders were returning to their neighbourhood after buying vegetables from the wholesale market in Manikganj’s Jaagir.
He was hacked to death on Monday, a month after blogger Avijit Roy was brutally murdered.
Police are yet to crack Roy’s murder case.
Locals caught two madrasa students and handed them over to police immediately after the attack on Babu at Tejgaon.
France conveyed its condolences to the families and relatives of Babu in a statement and called on the authorities to investigate “these revolting acts”.
“France reiterates its attachment to the freedom of opinion and expression, including online expression,” read the statement.
Islamists radicals have a history of attacking free-thinker bloggers and online activists in Bangladesh.
The EU delegation in Dhaka on Monday also condemned the killing.