<PAGE>
    
                                                            EXHIBIT 10.(i)(I)(4)

                           CONFIRMATION OF NEW BANK
                           ------------------------
                                 Section 2.6(c)

          Reference is made to the Short Term Credit Agreement, dated as of
September 15, 1994 (herein, as heretofore amended, modified or supplemented,
called the "Credit Agreement"), among Montgomery Ward & Co., Incorporated, an
Illinois corporation (the "Company"), and the Banks and Agents parties thereto.
Terms used but not otherwise defined herein are used herein as defined in the
Credit Agreement.

          1.  As of October 24, 1996 (the "Increase Commitment Date"), pursuant
and subject to the provisions of Section 2.6(c) of the Credit Agreement, The
                                 --------------                             
Industrial Bank of Japan, Limited, Chicago Branch (the "New Bank") hereby
becomes a party to and a Bank under the Credit Agreement with a Commitment equal
to $20,050,000.

          2.  The New Bank acknowledges and agrees that:

          a.  neither any Agent nor any other Bank makes any representation or
     warranty or assumes any responsibility with respect to any statements,
     warranties or representations made in or in connection with the Credit
     Agreement or any other instrument or document furnished pursuant thereto or
     the execution, legality, validity, enforceability, genuineness, sufficiency
     or value of the Credit Agreement or any other instrument or document
     furnished pursuant thereto,

          b.  neither any Agent nor any other Bank makes any representation or
     warranty or assumes any responsibility with respect to the financial
     condition or creditworthiness of the Company or the performance or
     observance by the Company of any of its obligations under the Credit
     Agreement or any other instrument or document furnished pursuant thereto,

          c.  the New Bank (i) has made and will continue to make such inquiries
     and has taken and will continue to take such care on its own behalf as
     would have been the case had it made Loans directly to the Company without
     the intervention of any Agent or any other Person, and (ii) has made and
     will continue to make its own credit analysis and decisions relating to the
     Credit Agreement independently and without reliance upon any Agent or any
     other Person, and based on such documents and information as it has deemed
     appropriate.

          3.  If the New Bank is a Non-United States Person, it hereby agrees to
deliver to the Applicable Agent a written representation and warranty
substantially similar to that contained in Section 8.4(b) of the Credit
                                           --------------              
Agreement.

                                      -1-
 

<PAGE>
 
     
          This Confirmation shall be governed by, and construed in accordance
with, the laws of the State of Illinois without regard to conflict of laws
principles.

                              The Industrial Bank of Japan, Ltd.
                              Chicago Branch


                              By: /s/ Hiroki Yamada
                                 ---------------------------
                                    Name: Hiroki Yamada
                                         -------------------


                              Copies of all notices, etc,
                              should be sent to:
 
 
 
                              Attention: Tim Avendt
                                        --------------------
                              Telephone: (312) 855-8499
                                        --------------------
                              Telecopy:  (312) 855-8200
                                        --------------------
                              Telex:     285381 (IBJ CGO)
                                        --------------------

                              Base Rate Loan Funding Office:

                               The Industrial Bank of Japan, Ltd.
                              -----------------------------------
                               227 West Monroe Street
                              -----------------------------------
                               Suite 2600
                              -----------------------------------
                               Chicago, IL 60606
                              -----------------------------------

                              Eurodollar Loan Funding Office:

                               The Industrial Bank of Japan, Ltd.
                              -----------------------------------
                               227 West Monroe Street
                              -----------------------------------
                               Suite 2600
                              -----------------------------------
                               Chicago, IL 60606
                              -----------------------------------


Accepted this 23rd day
of October, 1996.

The Bank of Nova Scotia, as Applicable Agent

By: /s/ A.S. Norsworthy
   ------------------------
     Name: A.S. Norsworthy
          -----------------

                                      -2-

<PAGE>
 
     
                                  October 24, 1996


To: Montgomery Ward & Co., Incorporated
and each of the Banks and Agents party to the
Short Term Credit Agreement dated as of
September 15, 1994 (the "Credit Agreement")
among Montgomery Ward & Co., Incorporated
and the various Banks and Agents named therein



          Re: Montgomery Ward & Co., Incorporated
              -----------------------------------


     This letter is to serve as notice that effective as of today, pursuant to
Section 2.6(c) of the above noted Credit Agreement, the Industrial Bank of
Japan, Limited, Chicago Branch is a "New Bank" under the Credit Agreement with a
Commitment of $20,050,000.  Accordingly, as reflected on the attached revised
Schedule I to the Credit Agreement, the Combined Commitment has been increased
from $435,650,000 to $455,700,000.



                                  Sincerely,

                                  The Bank of Nova Scotia,
                                  as Administrative Agent

                                  /s/ A.S. Norsworthy
                                  -------------------
                                  By: A.S. Norsworthy


                                      -1-


<PAGE>
 
 
                                   SCHEDULE I

                    BANKS, COMMITMENTS AND TERMINATION DATES
                    ----------------------------------------
                       (Sections 1.1, 2.6, 2.7 and 15.4)
<TABLE>
<CAPTION>
 
 
                                                                TERMINATION   
BANK NAME                                     COMMITMENT            DATE      
---------                                     ----------         ----------
<S>                                         <C>               <C>             
The Bank of New York                         $ 60,000,000     August 29, 1997 
The Bank of Nova Scotia                        60,000,000     August 29, 1997 
NationsBank, N.A.                              39,800,000     August 29, 1997 
The First National Bank of Chicago             33,000,000     August 29, 1997 
Bank of America Illinois/1/                    24,750,000     August 29, 1997 
The Industrial Bank of Japan, Limited,         20,050,000     August 29, 1997 
 Chicago Branch                                                               
CIBC Inc.                                      19,800,000     August 29, 1997 
The Northern Trust Company                     18,250,000     August 29, 1997 
The Long-Term Credit Bank of Japan, Ltd.       18,150,000     August 29, 1997 
The First National Bank of Boston              16,600,000     August 29, 1997 
Credit Lyonnais Chicago Branch                 16,500,000     August 29, 1997 
Union Bank of Switzerland,                     14,950,000     August 29, 1997 
New York Branch                                                               
ABN AMRO Bank N.V.                             13,200,000     August 29, 1997 
Banca Commerciale Italiana, Chicago             9,900,000     August 29, 1997 
 Branch                                                                       
The Dai-Ichi Kangyo Bank, Ltd., Chicago         9,900,000     August 29, 1997 
 Branch                                                                       
The Bank of Tokyo Mitsubishi, Ltd.,             9,900,000     August 29, 1997 
 Chicago Branch                                                               
Bank of America National Trust and              8,250,000     August 29, 1997 
 Savings Association/*/                                                       
The Sakura Bank, Ltd.                           8,250,000     August 29, 1997 
</TABLE> 
------------------------
 
/1/To be considered as a single Bank for purposes of the Step-up Fee.


                                      -2-


<PAGE>
 
 
<TABLE>
<CAPTION>
 
 
                                                                TERMINATION   
BANK NAME                                     COMMITMENT            DATE      
---------                                     ----------         ----------
<S>                                         <C>               <C>             
Swiss Bank Corporation                          8,250,000     August 29, 1997 
Union Bank of California, N.A.                  8,250,000     August 29, 1997 
First Bank National Association                 6,600,000     August 29, 1997 
PNC Bank, National Association                  6,600,000     August 29, 1997 
The Yasuda Trust and Banking Co., Ltd.          6,600,000     August 29, 1997 
The First National Bank of Maryland             4,950,000     August 29, 1997 
Istituto Bancario San Paolo di Torino,          4,950,000     August 29, 1997 
 S.P.A.                                                                       
Wells Fargo Bank, N.A.                          4,950,000     August 29, 1997 
Comerica Bank                                   3,300,000     August 29, 1997  
                                             ------------
                                             $455,700,000
</TABLE>