Bipolar membrane fuel cell (BPMFC) undergoes self-humidification due to formation of water at the interface of proton exchange layer (PEL) and anion exchange layer (AEL). Ion conductivity and dimensional stability of individual layers (PEL/AEL) play crucial role in the ohmic resistance/interface resistance of the BPM. A series of polysulfone based composite anion exchange membranes (AEMs) were synthesized by varying 2, 4, 6, and 8 % w/w of surface modified montmorillonite (MMT) nano clay (SM-MMT), and their electrochemical/physiochemical properties were optimized and compared with commercial AEM fumasep (R), FAS-50. The AEM with 6 wt% SM-MMT (AEM-SM-MMT-06) showed improved OH- conductivity (103.34 mS cm-1, 80 degrees C) compared to both AEM-pristine (72.68 mS cm-1, 80 degrees C) and commercial FAS-50 (86.61 mS cm-1, 80 degrees C), while dimensional stability (i.e. swelling ratio, %) of AEM-SM-MMT-06 (16.43 %) much higher compared to pristine AEM (47.37 %), but closer to fumasep (R) (FAS-50, at 80 degrees C, 15.78 %). Finally, BPM fuel cell test carried out without external humidification showed peak power density of 331.2 mW cm-2 with nafion-212 (PEL)/AEM-SM-MMT-06 (AEL), followed by other two BPMs (nafion-212/FAS-50, 270 mW cm-2; nafion-212/AEM-pristine, 246 mW cm-2).