Hishaam Hossain, a nephew of the 20-year-old Faraaz, and Arbaaz Alam, a childhood friend of the slain hostage, said they had heard the account from some of the freed hostages.
Early on Saturday morning, the suspected Islamic State terrorists who had stormed the Holey Artisan Bakery the previous night had released a group of women wearing hijabs. They had offered Faraaz the chance to leave too, Hishaam told The New York Times.
But when the attackers asked the two teenaged girls in western clothes who accompanied Faraaz where they were from, they said India and the US. The gunmen refused to release them, goes the account, and Faraaz declined to leave them behind.
All three, students at American universities, were found dead when Bangladeshi army commandos stormed the restaurant shortly afterwards and ended the siege.
Varying accounts exist of whether the terrorists selected the hostages they killed on the basis of religion, nationality or some other factor.
As a Bangladeshi who spoke Bangla fluently and was a practising Muslim, Faraaz would have ticked the gunmen's criteria for those they would allow to live.
"But his friends couldn't speak Bangla well, and the terrorists wouldn't let them go," Arbaaz told The Telegraph from Dhaka.
"What the terrorists didn't realise was that Faraaz wasn't just a Bangladeshi, he was someone who would stand by his friends from diverse backgrounds."
Arbaaz suggested that in Faraaz and his friends - the Indian Tarishi Jain and the Bangladeshi American Abinta Kabir - the attackers had come across three young people wearing the multi-cultural identities of a globalised world that would not fit into neat categories.
"They stood for something those terrorists could never understand," he said.
The trio had known one another from their time together at the American International School Dhaka. All three went to college in America: Faraaz and Abinta to Emory University in Atlanta, Georgia, and Tarishi to the University of California, Berkeley.
Faraaz's grandfather Latifur Rahman is chairman of the Transcom Group, one of the leading business houses in Bangladesh that owns the newspapers Daily Star and Prothom Alo. The boy's mother Simeen Hossain is managing director of Eskayef Bangladesh Limited, a Transcom-owned pharmaceutical firm.
Faraaz had come to Dhaka on May 18 on his summer holidays, family sources said. They added that he loved the Bangladesh cricket team and liked to dance.
The two girls too had deep connections with Bangladesh. Abinta was born in Dhaka and had spent a few years growing up in the US, where her father worked at the time. She then returned to Dhaka for high school.
Her family owns the Elegant Group that runs the Lavendar superstore in Gulshan, Dhaka's diplomatic enclave where the attack took place.
Tarishi's father Sanjiv runs a company that recycles used batteries in Dhaka. She had returned to the city for the summer to be with her parents and to intern with Bangladesh's Eastern Bank Limited.
At Berkeley, Tarishi had joined EthiCAL, a firm started by her seniors that reinvests all its profits into micro-finance for poor entrepreneurs from developing countries like Bangladesh. She worked in the marketing division.
"Tarishi's and my clouds only travelled together for a short time, but it was an adventure filled with love, learning and laughter," wrote Emerald Wong, one of Tarishi's friends at EthiCAL, who told this newspaper she too worked in the marketing division.
"I wish with all my heart that she was still here, floating by my side. I would give anything to have more time with this amazing girl."
On Friday, Faraaz, Tarishi and Abinta had agreed to meet at the Holey Artisan Bakery in the evening, Afsara Adiba, a cousin of Abinta's, said in an impassioned post on social media site Instagram.
"But she didn't come back alive," Adiba wrote. "Can I know what was her fault?"
Abinta had just broken her Ramazan fast with a family iftar before she left for the restaurant, Adiba said.
She had come to Dhaka on June 27 to spend time with her parents. Unlike Faraaz, she didn't speak Bangla well, Adiba said.
"Was it her fault that she couldn't speak Bangla that much?" asked Adiba. "Was it her fault that she was staying over (in the) USA? Or was that her fault that maybe she couldn't recite the Quran properly?"
-The Telegraph Calcutta