In the enquired case, in order to avoid any kind of disrespect with the name of Allah Ta'aala, it will be advised and preferred to refrain from using the towel; rather, use it as a Quran cover or cut the Bismillah part then utilize it, keeping in mind the honour and sanctity of the blessed name of Almighty Allah Ta'aala. (Fataawa Hindiyyah Vol. 5 Pg. 322) 

AND ALLAH TA'AALA ALONE IN HIS INFINITE KNOWLEDGE KNOWS BEST

ANSWERED BY: MOHSIN KHAN 

CHECKED AND APPROVED BY: Mufti Muhammed Saeed Motara Saheb D.B. 

Islamic Date: ١ ربيع الاول ١٤٤١ 

English Date: 30 October 2019