This study proposes an efficient and improved model of a direct storage bidirectional memory, improved bidirectional associative memory (IBAM), and emphasises the use of nanotechnology for efficient implementation of such large-scale neural network structures at a considerable lower cost reduced complexity, and less area required for implementation. This memory model directly stores the X and Y associated sets of M bipolar binary vectors in the form of (MxN(x)) and (MxN(y)) memory matrices, requires O(N) or about 30% of interconnections with weight strength ranging between +/-1, and is computationally very efficient as compared to sequential, intraconnected and other bidirectional associative memory (BAM) models of outer-product type that require O(N(2)) complex interconnections with weight strength ranging between +/-M. It is shown that it is functionally equivalent to and possesses all attributes of a BAM of outer-product type, and yet it is simple and robust in structure, very large scale integration (VLSI), optical and nanotechnology realisable, modular and expandable neural network bidirectional associative memory model in which the addition or deletion of a pair of vectors does not require changes in the strength of interconnections of the entire memory matrix. The analysis of retrieval process, signal-to-noise ratio, storage capacity and stability of the proposed model as well as of the traditional BAM has been carried out. Constraints on and characteristics of unipolar and bipolar binaries for improved storage and retrieval are discussed. The simulation results show that it has log(e) N times higher storage capacity, superior performance, faster convergence and retrieval time, when compared to traditional sequential and intraconnected bidirectional memories.