I don’t know what “panky” means, but I do know that handkerchiefs are back. Why anyone would want to keep a dirty hanky in their pockets, I don’t know. But it is rather elegant accent to top off a breast pocket with one. The handkerchief became a fashion accessory in the 16th century and since then its been dropped, blown, waved, and worn.
If you would like to know how to fold one, this handy hanky infographic (c. 1950) for the new “TV fold” is for you: