Nikhil Joarder, who was in his early 50s, was attacked as he sat outside his shop in Tangail on Saturday afternoon.
Police said he had been arrested in 2012 for allegedly making derogatory comments about Islam, then released.
Islamic State claimed the attack although the authorities deny the group is active in the country.
A number of similar recent killings in Bangladesh have been claimed by various Islamist militant groups.
- Who is behind the Bangladesh killings?
- Attacks send shockwaves through Bangladesh
- The threat of small-scale terror attacks
On Monday, Xulhaz Mannan, a leading gay rights activist and editor at the country's only LGBT magazine, was hacked to death along with another man in his Dhaka flat.
A Bangladeshi militant group affiliated to al-Qaeda, Ansar al-Islam, said it was behind those killings.
Last year, four prominent secular bloggers were also killed with machetes.
The four bloggers had all appeared on a list of 84 "atheist bloggers" drawn up by Islamist groups in 2013 and widely circulated.
Who is being targeted?
The grim list of those who have fallen victim to attacks by Islamist militants in Bangladesh is growing ever diverse.
Secular bloggers, academics, gay rights activists, and members of religious minorities including Shia, Sufi and Ahmadi Muslims, Christians and Hindus have all been killed, many of them hacked to death.
That a university professor whose family said believed in God could also be murdered suggests the list of those at risk has widened further.
Who exactly is behind the attacks remains murky. Bangladesh has myriad extremist groups and there have been few convictions over the attacks.
Bangladesh has disputed claims by so-called Islamic State or al-Qaeda-linked groups for the attacks, instead often blaming opposition parties or local Islamist groups.
But until the killings stop the government itself will face accusations of not doing enough to protect minorities in the Sunni-dominated nation.
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